Lawyers Professional Liability Insurance

The importance of lawyers professional liability insurance is often overlooked by the new attorneys. Most of the attorneys do not take this type of insurance even if the state makes it mandatory to carry this insurance. Most of the attorneys only buy the basic policies without bothering about the coverage of the policies. This type of ignorance may cost the attorney huge money leading in to failure of his carrier most of the time. Whether the attorney is a criminal lawyer or “systematic” attorney, he is subject to the risk of being sued. About 6 percent of the total attorneys have faced liability suits. The attorneys carrying proper insurance are not required to pay a single penny in settlement. The insurance company takes care of everything, after paying the deductibles. Without best coverage, many attorneys have to adopt other ways to handle their judgment. Many lawyers have to shut down their practices in worst situations. All this can be easily avoided by educating yourself about what type of insurance to buy.


Two basic forms of lawyers professional liability insurance are available. “Claims made and reported” is the most popular form of this insurance. Under this insurance, the lawyers get compensation on claims when they arise. Although many insurance companies have a prior acts clause but the actual date of liability is not important. There is a cut-off date for all past acts, whether they are omissions or errors on behalf of the attorney through this clause. Nothing can be filed before that date with this kind of insurance. But the process is quite different for the occurrence-based coverage – the second form of lawyers professional liability insurance. When an incident occurs, claims are filed.

Both the above mentioned forms of lawyers professional liability insurance carry the same options. The compensation ranges between 100000 dollars to 10000000 dollars, with more costly policies having high deductibles and premiums. If the deductibles are quite higher, there is the option of getting first dollar defense. In case of settlement, the lawyers do not have to make payment with the first dollar defense. This makes you responsible for deductibles even if you win the case without any indemnity. Though the first dollars defense has high premiums but it is still considered to be more risky for the insurance providers. The same holds true if you filed claims before and/or you practice an area of law that are prone to lawsuits. But there is a way to lower your expenses. If the insurance company provides risk management classes you may qualify for the discount if you have attended each session. The amount of discount exceeds 5 percent of the premium in some cases which cannot be ignored. The lawyers can save about 100 dollars just by attending these classes on very costly insurance policy. During the risk management session, the lawyers learn how to minimize the risks to avoid occurrences of the lawsuits.

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