Malpractice Insurance

Legal malpractice insurance can have a significant effect on the outcome of legal malpractice cases. By, law attorneys are not required to obtain legal malpractice insurance.  Some types of legal malpractice insurance only cover certain conditions. Some provide only partial coverage and do not cover cases of fraud theft or willful injury.

If a lawyer does not have legal malpractice insurance it is possible that victims of legal malpractice will not have any legal recourse against a negligent legal professional. If a lawyer does have legal malpractice insurance typically two things can happen in a legal malpractice case. First, the legal professional's insurance company will defend the client's former attorney against the claims. Secondly, the insurance company will allot resources to pay the client in the event that the defendant is found guilty of malpractice.

Legal malpractice is defined as any act which is negligent or wrongfully executed by an attorney who causes monetary damages to his/her client. Legal malpractice can be perpetrated in any field of law.

Legal malpractice can be carried out in a number of ways. An attorney can be held liable for cases where a case was dismissed because of an attorney's negligence rather than the legitimacy of the case. Legal malpractice can also be the result of an attorney's failure to properly or adequately pursue a case, failure to secure experts and witnesses, and failure to act before calendar deadlines and statutes of limitation. Any action or negligence on behalf of a legal professional that causes undue injury to their client is considered legal malpractice.

It is estimated that five to six percent of all private attorneys face legal malpractice charges each year. The cost of litigation is often greater than the cost of legal malpractice insurance; therefore many attorneys seek this type of protection. Most types of legal malpractice insurance offer “claims made” protections meaning that the attorney is protected in any claim made during the policy period regardless of when the alleged malpractice took place.

While it may be more difficult for a victim to recover damages from an attorney who is not covered by legal malpractice insurance, it is still very possible. Some attorneys without legal malpractice insurance choose to represent themselves in a malpractice case. If they are found guilty of legal malpractice, they are required to pay the award determined by the court without the help of legal malpractice insurance. This absence of legal malpractice insurance can be debilitating to the attorney who must defend him/herself against malpractice claims. The absence of legal malpractice insurance can also be injurious to a plaintiff whose case can proceed into costly litigations.

Legal malpractice insurers are licensed by the insurance regulating authority in each state in which they write coverage. One source of information on the carriers that write legal malpractice insurance in the state where you primarily practice is the Insurance Information section of the website of the ABA Standing Committee on Lawyers’ Professional Liability.

The web resource includes a non-exhaustive directory of “admitted” carriers by state. Each company name in the directory is a link that will take you to a description of essential features of that company’s standard policy features, including the size of firms covered, coverage limits, and other coverage terms. If you are part of, or plan to start, a solo or small-firm practice, look for those companies indicating they write for firms with as few as one lawyer. The Insurance Information web resource also contains helpful resources you may wish to review before shopping for insurance, such as the “Checklist for Purchasers,” and articles on “Costs” and “Coverage Gaps”. When shopping for legal malpractice insurance, it is good to contact at least three carriers, in or to compare costs, deductibles, coverage limits (per claim and aggregate), other coverage terms.

If you are in the market for legal malpractice insurance for the first time, you may want to check with your state insurance regulating agency to ensure that a particular carrier remains in good standing in your state.

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