Practicing attorneys are sued statistically at least once during their careers; this is why attorneys need to carry legal malpractice insurance. The cost of malpractice insurance is impacted by the location of the practice, the size of the firm, your specialty and background and the current political climate. Also referred to as professional liability insurance, you will be glad you invested in legal malpractice insurance.
Practices specializing in areas considered high risk, such as securities, real estate and banking typically carry higher premiums. It may make sense to have a high deductible to lower the cost of the premium. Consider what your budget will allow and take into consideration the premium expense when calculating client fees.
Where you practice is relevant to the calculation of insurance premiums. This is taken into account to determine your “risk factor.” If you work in a large firm, you may get a discount based on the firm’s record or adversely be charged more. If you practice in a small town, you may be grouped with big city attorneys nearby. These are issues you will want to explore when choosing a reliable legal malpractice insurance carrier.
Discounts are typically offered for preventive measures in place such as a system for docket control. Discuss these with your agent to ensure you are offered any possible discount on your premium. You can ask your agent for the criteria of the underwriter and comply as much as possible to keep costs lower. Whether or not a claim against you results in a lawsuit, the underwriter will look at claims filed against you or the firm.
If you are rejected, cancelled or not renewed by an insurance company, this is marked against you; therefore, research beforehand so you have a better chance of being accepted with your initial application. Bar proceedings and suing clients for fees are other red flags to underwriters. Being thorough in choosing an insurance company to represent you with a legal malpractice insurance policy will ensure the investment is worth it.