Courting Malpractice Carriers, A How-to Guide

A practicing attorney should never be without lawyer malpractice insurance. One successful suit brought by a disgruntled client could ruin a struggling law firm. Insurance against such a situation can cost as little as a few hundred dollars yet save the attorney several hundred thousands of dollars.


Small legal firms are far more likely to be sued for malpractice than their big-firm brethren are. These financially strapped companies are often short staffed, with less than optimal technology. They check facts less thoroughly, and rely on manual calendar checks and conflict of interest oversight. Mistakes happen more often, and malpractice accusations result. Baseless malpractice claims still cost legal firms considerable money. Lawyers still must be paid to fight these baseless claims. Malpractice insurance covers these attorney fees and other related expenses.

An attorney just hanging out his or her shingle should find the right malpractice insurance carrier before signing on the first legal client. If skeptical at all about the need, he or she should consider several factors about going without this vital coverage. He should consider if his new firm is experienced in minimizing liability exposure. She should determine if she could absorb the financial impact of a serious malpractice payout and still continue in business. If the answer to either is no, malpractice insurance is a must.

In choosing lawyer malpractice insurance carriers, an attorney should consider price. That should not be the only factor, however. Some higher-priced insurance carriers offer greater experience in fighting malpractice claims, coverage features others neglect, and higher win: loss ratios. Some offer financing options that spread premium payments throughout the year.

When selecting a malpractice carrier it is important to inquire about carrier availability. The lawyer seeking coverage should ask if someone is available by phone, e-mail or text 24/7. She or he should ask about the options for ceiling on the coverage. The number of experienced employees at the carrier firm is important, as well as any risk management training offered to the insured. It is also wise to verify that innocent partner cover and title agent services are part of the coverage.

Another handy option is the extension of reporting period should one or more of the attorneys in the covered practice that are disabled, die or retire. First Dollar Defense coverage, though not typically part of the standard package, could save a legal firm far more than the cost of adding it to the coverage. First Dollar Defense assures that the insured would not need to pay any out of pocket costs for defending against claims that result in no indemnity.

An attorney should first search for a lawyer malpractice insurance carrier with an excellent track record, the right plan with the right features, and the right ceiling on coverage. Once the list of prospective carriers is narrowed down, then fees should be compared. Going without this vital coverage could cost far more than the annual premium.

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