Buying malpractice insurance is as tricky as any other kind of insurance. You’re purchasing it based on the promise that should something happen, you will be protected. That’s not tangible, but you need to protect yourself from potential mistakes. You’re likely confident in your abilities as a lawyer and believe you can avoid such matters, but even the most experienced attorneys can face lawsuits against them. As it turns out, there are plenty of reasons why you need malpractice insurance as a lawyer.
Malpractice Insurance Is for All Attorneys
Malpractice insurance covers attorneys who someone claims failed to perform their professional duties based on existing standards. Lawyers are highly trained professionals, but they can miss deadlines, represent clients when a conflict of interest exists, fail to file the proper motion, or raise certain defenses and arguments. These situations can have grave consequences when disgruntled clients sue their attorneys.
Based on the policy’s specific language, malpractice insurance might cover a legal network or an entire law firm. However, it can also cover full- and part-time lawyers, in-house counsel, contract lawyers, arbitrators, and mediators. This kind of insurance is even necessary for lawyers doing pro bono work. Few states require malpractice insurance for lawyers, but every attorney should have it for peace of mind.
How Malpractice Insurance Covers Attorneys
Most of the time, lawyers can’t preemptively have clients waive their rights to litigation if things don’t go how they expect or want. That’s something most industries can do, but attorneys can’t. If a client is dissatisfied and sues, their attorney might have to pay them all the possible funds the client might have gotten if a case was handled right.
In many instances, the lawsuits allege professional negligence. This might happen because of administrative errors, missed deadlines, or poor legal advice. Breach of duty is another possibility when attorneys aren’t as diligent or competent as legal standards demand.
Malpractice insurance often has coverage limits, but the insurance provider pays out any dollars within that coverage and doesn’t come out of your pocket or your firm’s money. You pay nothing if a judgment against you falls under the coverage limit. In cases where the judgment is more than your insurance coverage, you at least have that much to cushion the financial blow.
Many malpractice policies also cover defense costs, and that’s when the insurance would pay for your representation and related court costs. Tail coverage is also a good feature to include in your malpractice insurance. It lets you report claims after your policy has expired for events that transpired when the policy was active, and that’s useful when you switch insurers or retire.
Consider Your Coverage
Whether you work independently or as part of a larger firm, make sure your office has the right malpractice insurance for practicing lawyers. If you don’t have coverage or enough coverage, you must get it immediately to keep practicing. Even if you have coverage, review it regularly to ensure it’s still appropriate for your current professional circumstances.
