In Defense Of Lawyers Professional Liability Insurance

Recent graduates who passed the bar exam are so anxious to start practicing law that they forget how vital adequate lawyers professional liability insurance is to a successful practice. A new attorney may join a large or small firm, then forget about obtaining even the most basic coverage. However, almost anyone can be sued, by either clients or third-party claimants. No legal firm or individual is immune from lawsuits, whether it is corporate law or criminal defendants.


Each year, six percent of working attorneys are faced with allegations which may range from wild accusations to simple claims regarding clerical errors. Even if cleared, lawsuits still costs an attorney out of pocket court fees and time wasted on defense if insurance is not in effect. Those with proper indemnity and claims policies have not only the cost of defense paid for, but any settlements made on behalf of the plaintiff are covered as well. The latter is usually far more expensive, as verdicts can range in the millions of dollars for high profile cases. An attorney will essentially be out of business, with little chance to resume at a later time.

Also, lawyers professional liability insurance covers claims reported during a period when the policy is in effect, even if the actual event happened before the policy was purchased. Many carriers impose a retroactive limit, however, on how far back alleged events may be covered. Before a claim is paid, deductibles must be met per claim, generally to defense costs and indemnification. Premiums, which vary by state, are based on amount of coverage and deductibles, with higher deductibles netting lower premiums. Deciding on low coverage just to offset cost is a risk almost no professional can afford to take.

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