It seems counterintuitive that lawyers would need to source their own malpractice insurance. After all, do the people filing the malpractice suits really get sued themselves? According to small business insurer the Hartford, lawyers themselves can actually be sued for a number of reasons: claims of negligence, breach of confidentiality, administrative errors, missing filing deadlines, and professional misconduct. And as any lawyer knows, all it takes is a perceived error for a lawsuit to start. That’s why it’s so important to consider legal malpractice insurance.
Top 5 Providers of Legal Malpractice Insurance
Below we’ve listed some of the top places to begin looking for malpractice insurance for attorneys. Because of the highly specialized nature of legal malpractice insurance, you may want to source it from companies that specialize in lawyer insurance. Finding a quote comparison site might be too general for an insurance type that is so tied into the type of law your practice handles.
- ALPS: Best for Variety of Products
- Aon Attorney’s Advantage: Specializing in malpractice insurance for lawyers
- Brunswick Companies: Risk management
- L Squared Insurance Agency: Helping you understand coverage
- biBERK: Well-rated company
ALPS: Best for Variety of Products
ALPS advertises itself as “the nation’s largest direct writer of lawyers’ malpractice insurance.” In addition to professional liability, it also offers cyber response insurance and employment practices liability. In the site, you can either contact an agent or apply to get an in-depth quote. It also allows you to get a “ballpark estimate,” however that requires fairly detailed personal information and details about your practice.
Aon Attorney’s Advantage: Best Provider that Specializes in Malpractice Insurance for Lawyers
Aon Attorney’s Advantage specializes in malpractice insurance for lawyers. In order to get a quote, the site wants you to fill out an application.
Brunswick Companies: Best for Risk Management
Brunswick Companies is an insurance and risk management company that has been around since 1972. Legal malpractice insurance is just one of the products it offers. So you get both the insurance policy and risk management services. You can get a quote by filling out a request form.
L Squared Insurance Agency: Best for Helping Small Businesses Understand Coverage
L Squared handles a variety of business insurance products. In addition to legal malpractice insurance, it also has a business owners policy (BOP) product, cyber liability insurance and worker’s compensation insurance, as a few examples. Because it’s an agency, it can help you understand which are the best insurance products and coverage amounts for your situation. To start the process, you must fill out an indication form detailing your practice.
biBERK: Best for a Well-Rated Company
If you do want to look into a general small business insurer to compare rates, biBERK is a Berkshire Hathaway Company, one of the largest and most well-rated insurers in the market. It advertises that you can buy a policy and save up to 20 percent. For a quote, you must enter a valid phone number so a licensed agent can follow up with you.
What is Legal Malpractice Insurance?
You’ve probably heard of medical malpractice insurance or nursing malpractice insurance. Legal malpractice insurance is its litigation profession cousin. You might commonly see it referred to as lawyers professional liability insurance. It’s simply a type of insurance that protects lawyers when damages are claimed by the result of errors or omissions by the lawyer or colleagues.
For example, below are a couple incidents where this type of insurance is a must, in addition to the lawsuit reasons listed above:
- When a client is awarded less than they hoped after a case
- Errors made in applying statue or interpreting the law
In short, if someone claims damages because of a perceived error on the part of the lawyer, that lawyer could be sued.
Often these lawsuits can be quite damaging. As listed by insurer Aon Attorney’s Advantage, the average jury awarded $198,878 as part of legal malpractice suits and 22 percent of jury awards are over $1 million.
As such, you’ll often see coverage that runs in the millions. For instance, a plan may offer $1 million per claim and $3 million aggregate.
Types of Legal Malpractice Insurance
When looking for malpractice insurance for attorneys, it’s important to make sure you’re working with an insurer, broker or agency that can write a custom plan for your type of practice or law firm. For instance, Aon Attorney’s Advantage offers coverage for everyone from solo general practitioners to specialty firms that handle riskier cases. The higher the risk and the larger the firm, the more coverage you are likely to need.
Unlike other types of insurance, legal malpractice insurance tends to be offered on a claims-made basis. According to insurer ALPS, claims-made policies mean that claim has to be filed while the policy is in effect in order to be covered, versus occurrence where the event alone has to happen while the policy is in effect.
You may also see the term “retro date” on claims-made legal malpractice policies, which is usually the date after which the negligent act can happen. The American Bar Association gives the example that a policy period may run from Aug. 15, 2009, to Aug. 15, 2010, but have a retro date of Jan. 1, 2003. The claim has to happen during that one year of policy effectiveness, but the malpractice event can happen Jan. 1, 2003 or later.
How Much Does Malpractice Insurance Cost?
Malpractice insurance for attorneys is another one of those insurance types where the cost can vary greatly based on a number of factors. Embroker, the digital insurance quote comparison powerhouse, lists them:
- Size of your law firm: larger law firms have higher rates
- Prior claims: a claims history can mean more expensive policies
- Coverage amount: this factor most directly affects premiums, since more coverage is more expensive to carry
- Deductible: higher deductibles mean lower premiums, since you’re paying a higher amount for coverage to take effect
- Length of time with a firm: premiums tend to increase the first few years a lawyer is at a firm because the lawyer amasses more cases and thus more risk – however, premiums tend to even out around the sixth year
- Location: denser populations can increase risk of claims and boost premiums
- Type of practice: some practice types naturally have higher risks attached to them because of their complexity, like securities or medical malpractice, which can increase premiums
- Risk management: in some cases, you could have lower premiums if you demonstrate that you have a risk management policy in place
L Squared lists some premiums as examples:
- Annual premiums can run $300 to $500 for a new attorney in a low-risk practice.
- Average costs run around $1,200 to $2,500 per year.
- Higher risk attorneys can pay $3,000 to $10,000 per year.
Even lawyers themselves can get sued if someone claims damages due to an error or omission on their part. That’s where legal malpractice insurance can help protect against these claims. Prices can go from hundreds to thousands per year, depending on a number of factors. Because malpractice insurance for lawyers is so specialized, it pays to shop around with companies directly.