Professional Liability Insurance and What You Should Know About It as a Young Attorney
As an attorney, you’re exposed to the risk of having a malpractice lawsuit filed against you anytime, but did you know that you can protect yourself from it by getting proper Professional Liability Insurance coverage? If you don’t know too much about it, then don’t worry, since we’re going to answer some of the questions you may have about PLI in the paragraphs below.
What does PLI cover?
PLI basically covers the lawyer’s legal liability that can result from personal injury and professional services that arise from offering legal services.
What does a PLI policy cover?
There are many types of services that you’re going to be covered for if you decide to get PLI. To name some of them, they are acting as a trustee, guardian, executor, but also as a conservator and administrator; acting as a title agent, notary public, arbitrator or mediator; offering legal services to your customers.
What are the specific types of injuries that a PLI policy covers?
There are many types of injuries this policy covers, including wrongful eviction, false imprisonment, defamation, but also abuse of process and malicious prosecution.
How much professional liability insurance coverage do I need?
In determining the amount of coverage you require there are quite a few factors you need to consider. For instance, one of them may be your professional area of practice and as you may very well know, some areas have a much higher frequency of claims than others. In fact, real estate lawyers and lawyers for personal injury plaintiffs are the ones that usually have to deal with the greatest number of claims.
It’s also very important that you consider your companies’ monetary value and also the damages that may arise if one of the claims stems from your largest case. Coverage limits are also influenced by your partners’ and your personal assets. In general, as a young lawyer, you require less coverage since there’s a low chance you have accumulated a large number of assets. The truth is that this is going to change over time and that should be reflected in your coverage limits as well.
If your company or you are a limited liability partnership or a law corporation, then you need to check the government and also your state bar regulations. For instance, in CA, you are required to respect certain limits based on the company’s structure and size. To learn more about how much coverage you need to get, it’s recommended that you get in touch with a well reputed insurance broker.
What else do I need to know about PLI?
There are many terms in your PLI that you have to properly understand, including:
Full Prior Acts Coverage
Provides coverage for claims that result from any services the company rendered since the day of the company’s inception. To be clear about the inception date, it counts from the day when the company bought PLI.
Claims Made and Reported
Claims need to be asserted against the insured party if they are to be covered. Also, the insurance company needs to be sent a written notice based on the policy’s terms and conditions that the company has been made aware of upon purchasing the policy.