Legal Malpractice Insurance
When it comes to the outcome of malpractice cases, they can be directly impacted by whether you have legal malpractice insurance (LMI) or not. According to the law, you don’t really need to get LMI. Certain LMI premiums will also cover certain conditions only. Depending on the one you get, it may not cover cases of willful injury, theft, and fraud. In terms of coverage, they may also provide partial coverage only.
As an attorney, you need to be fully aware of the fact that if you don’t have LMI, then legal malpractice victims won’t have legal recourse against negligent attorneys. As an attorney, if you do decide to get legal LMI, then here’s what happens if you’re sued for malpractice. First of all, your insurer will try to defend you against the claims field against you and secondly, your insurer will settle to pay the amount of money claimed by the client if you’re found guilty.
Legal malpractice is basically an act that involves faulty or negligent execution by the lawyer which results in the client suffering monetary damages.
There are many ways that legal malpractice can take place. For instance, you may be held liable if the case was dismissed due to your negligence instead of the case’s legitimacy.
If the attorney fails to pursue a case adequately or properly, then this can be grounds for his client to sue him for malpractice. Failure to act prior to statutes of limitation, calendar deadlines, and failure to secure witnesses and experts can also be solid reasons for which clients sue their lawyer.
In total, it seems that between 5% and 6% of attorneys will face charges on a yearly basis because of malpractice. Litigation costs though are usually a lot higher than buying LMI. Because of that, as an attorney, you certainly need to get it as soon as possible. The majority of LMI types offer claims made protections. What are these? Well, they basically protect the lawyer if someone decides to file a claim against them while the policy is active.
As a victim, it can be very difficult to recover damages from a lawyer who doesn’t have LMI, but it’s not impossible.
There are many lawyers that don’t have LMI and in the event they’re sued, they will represent themselves in court. In case the court finds them guilty, they need to pay the entire amount awarded by the jury. If the plaintiff lacks LMI the case can also get very expensive for him, since litigation costs are usually very high.
When it comes to LMI, insurance companies are licensed by the state-specific insurance regulating authority where the coverage is written. To learn more about the carriers writing LMI in the state where you practice law, be sure to visit the ABA’s Insurance Information section.
A directory of admitted carriers by state is available online. For those who want to learn more about a specific carrier, all they have to do is click on the link associated with it. Once they do so, they’ll be taken to a page where they can learn more about the insurer’s policy features, coverage limits, size of firms covered, and other similar information. If you want to start a small firm or maybe a solo firm practice, then it’s highly recommended that you consider looking for companies that state they write for firms with 1 attorney.
The Insurance Information online resource also contains a wide range of other useful resources that you should certainly check out prior to buying insurance. Some examples include information on coverage gaps and costs, but also a Checklist for Buyers.
One of the most important things you need to keep in mind when you plan on buying LMI is that the more carriers you contact, the easier it’s going to be for you to compare coverage limits, deductibles and other costs.
To check whether a certain carrier will remain in good standing, be sure to get in touch with the state insurance regulating agency.