Learn About Professional Liability Insurance
Professional Liability Insurance for Legal Malpractice
Like many other businesses, managing a law practice is full of risks. One of the main risks you face as a lawyer for instance is being sued for malpractice by a disgruntled customer. It doesn’t even matter whether the client has a case, because this still has a massively negative impact on your reputation and finances. The good news is that you can easily cover the costs associated with it by getting malpractice insurance coverage.
Should I get Coverage?
The short answer to this is yes. If you’re a small solo practitioner, then the first question you may ask yourself is whether you should get an insurance policy or not. After all, it could be that your office phone doesn’t ring that often and you don’t really get too many clients anyway, so what’s the purpose of getting coverage?
Well, beyond the obvious purpose of being protected in case someone decides to sue you, the answer also depends on the specific jurisdiction in which you practice. Certain jurisdictions may require that you have a minimum coverage, while others leave that up to the attorney.
There’s also another type of jurisdiction that allow the lawyer to take the decision himself, yet it requires a written signature prior to working with clients, informing them the attorney lacks coverage before. Regardless of the jurisdiction you find yourself in, it’s very important that you get malpractice insurance.
In fact, this is very important, especially due to the fact people have access to a lot of information from a wide range of sources, including TV shows and the internet. Thanks to them, clients can demand better value for their money and want to hire someone that is very good at their profession and has many years of experience. If something doesn’t go according to the client’s expectations, he may decide to sue for professional malpractice.
Because of this reason, it’s very important that you get coverage to insure your personal assets and practice against frivolous and legitimate malpractice claims.
There are many benefits of having malpractice insurance in place, including:
- May cover the cost of hiring legal counsel (independent) to represent you in court in the event someone files an ethical complaint against you.
- Might fulfill your professional and ethical obligations.
- Legitimizes your practice by building customer confidence in your practice.
- May provide your practice with a way to outsource risk management.
- Gives you peace of mind.
- Protects your associates and staff.
- Safeguards you against professional negligence claims.
How Much Does It Cost?
The cost varies depending on the chosen policy. However, the expenses of your malpractice overage won’t be your largest expense. Some of the main factors that can impact your coverage cost include your geographic location, the size of your practice, the amount of time you’ve been practicing for, your practice area, and your policy provider.
For example, real estate and securities attorneys may have to pay a higher premium since their fields are regarded as high risk. This is also true for those who’ve just been recently admitted into the Bar.
The size of your law practice is yet another factor that influences the amount of money you will need to pay for malpractice coverage. In general, a big company will pay less for the premium per insured compared to solo or small practices. If a firm also has a large number of lawyers working for it, it can take advantage of significant discounts.
Are There Any Deals Out There?
Yes there are. Even though there are plenty of determining factors, some of which cannot be controlled by the lawyer, you can take advantage of certain discounts. For instance, memberships to different state bar and voluntary associations may offer discounts on your malpractice insurance premium. On top of that, there are also plenty of companies that offer discounts to lawyers that have been recently admitted. If you’re a solo practitioner or a small practitioner, you can receive further discounts.
Due to the fact premiums vary from 1 provider to the next, if you really want to get the best premium for your policy, you need to start researching online as soon as possible and see which company can offer you the best premium rates. One last thing to bear in mind is that you should never start looking for a new provider when your policy is about to expire. Always do it way ahead of time.