Legal Malpractice Insurance

Lawyers are assumed to have legal expertise, and they’re expected to apply their expertise correctly when hired by clients. Should they make a mistake, they may be sued for any damage or harm their oversight causes. Legal malpractice insurance helps lawyers protect themselves from covered lawsuits that accuse them of making errors. Legal malpractice insurance is a specialized form of professional liability insurance that’s designed for legal professionals. It generally protects lawyers from lawsuits that accuse them of doing subpar work or making mistakes. In most cases, a policy will typically pay both the legal fees and any settlements associated with a covered suit (up to the policy’s limits).

Anyone who practices law may benefit from having attorney malpractice insurance. Lawyers who have their own law firms, of course, should consider getting an attorney malpractice policy. Lawyers who work for larger firms might also want their own policy. For, while their firm’s policy might provide protection while they’re working for the firm, it probably won’t offer coverage for any consulting or pro bono work done outside of the firm. Having a personal attorney malpractice policy can help ensure that a lawyer has coverage for potential lawsuits when they moonlight at another job or do volunteer legal work.

In general, attorney malpractice insurance policies provide coverage for errors and omissions that arise from the covered lawyer’s primary area of practice. Many policies also provide protection for incidental activities that a lawyer might perform, such as acting as an executor or trustee, acting as a notary public, acting as a member, director, or officer of a professional organization, and serving as a title agent. There are other acts that most attorney malpractice policies don’t cover. These usually include: Legal services rendered to another business that is controlled or owned by the insured lawyer Services rendered as a fiduciary under the ERISA ACT; Property damage or bodily injury caused by the insured lawyer; claims filed between two lawyers who work for the same law firm; and dishonest, malicious, criminal, or fraudulent acts. Coverage for services rendered as a fiduciary, and property damage or bodily injury caused by a lawyer are frequently available through other insurance policies. Because the exact coverages that a particular policy provides can vary, lawyers should carefully review their policy’s terms and conditions to find out what protections they have.

Most attorney malpractice insurance policies (and most other forms of errors and omissions insurance) are written as “claims made” policies. Claims made policies typically only cover incidents that are reported during their effective period. They may have retroactive dates and discovery periods that further define what incidents are covered, but the primary trigger for coverage is the act of filing a claim -- and that must be done within the timeframe set forth by the policy’s terms and conditions.