Malpractice cost for attorneys: How much is it?
There are many factors that impact the cost of malpractice insurance for attorneys and some of them include the area of law the attorney practices in, deductible amount, but also the amount of coverage needed and the number of years the attorney has been in business for.
Years in Business
As surprising as it may be, it’s usually cheaper to get malpractice insurance if you’re a new lawyer than if you’re an experienced one. The reason this is so is because new attorneys usually take up less complex cases, meaning that the chances of making mistakes when representing the client are low. If the risk is low, then the insurance cost is also low. In terms of cost, as a new lawyer you can expect the premium to cost about seven hundred dollars a year.
If you’re an attorney with 11 to 20 years of experience, then your chances of being sued for malpractice are much higher. If you’re an experienced attorney, then you’re also taking up more difficult cases and this results in higher risk. Therefore, in terms of cost you can expect to pay anywhere from five thousand to fifteen thousand dollars a year for insurance.
Amount of Coverage Needed
In order to determine how much coverage you need as an attorney, you first of all need to take a look at your personal assets, but also your business assets and income. That’s because in the event a client decides to sue you, they can go after your business and personal assets as well.
There are also many other factors you should consider when it comes to calculating the cost of losing a malpractice case and that is the number of billable hours you miss while fighting your own lawsuit. When you’re sued by a client, you have to pay for your own lawyer and this means a lot of money and time are wasted in the process.
If you cannot afford losing too much in a malpractice lawsuit, then you need to get a greater amount of coverage.
It’s important to bear in mind that if you choose to get a low deductible, then your premium is going to be higher and vice-versa. So if you want to pay less for your monthly premium, then you need to increase your deductible.
Area of Practice
Based on information from the ABA, the areas where the number of malpractice lawsuits is at its highest include Corporate Law, Probate Law, but also Family law, Real Estate, and Personal Injury.