Do you need professional liability insurance for your law practice? When you set up a law practice you face a lot of start up expenses. One of the most costly being professional liability insurance.
QUESTIONS TO ASK:
Is it required?
Not all states require attorneys to carry professional liability insurance.
Some jurisdictions allow a lawyer to forgo professional liability insurance. However, first they must advise a client. Then they need to get a client’s written acknowledgement that they have been so advised. Check with your state bar rules. Know what your state mandates.
Even if your jurisdiction doesn’t require professional liability insurance, it still may be wise to get insurance for peace of mind.
Is it necessary?
Be aware that some referral sources, such as Legal Service Plan companies, require that the attorneys they contract with have a minimum of $100,000 per claim and $300,000 overall of Professional Liability Insurance.
What does it cover?
“Prior Acts” coverage covers claims arising from legal services rendered before the start date of the policy. The “Retroactive Date” is the date after which claims are covered by the policy.
What affects my premium?
The factors that could impact your premium include your jurisdiction, attorney record and practice area. According to The Washington Times, in 2012, the most malpractice claims were in the real estate and the personal injury fields of law. As with most insurance plans, the rates depend on the deductible you are willing to pay. Therefore if your practice is not likely to generate malpractice claims such as bankruptcy or estate planning, consider a higher deductible for lower premiums.
What does it cost?
As a solo practitioner, an annual policy could run anywhere from $1,500 to $3,000. Therefore, research your options with different insurance carriers. Check your State Bar Association for a list of professional liability insurance carriers. Ask attorney friends for what coverage they may have, what premiums they pay, and what company they use.
Ultimately, you have to decide if this protection is right for you. First, get the facts. Then talk to others.
What say you? Do you do have professional liability for your law practice? Do you have tips to share? Leave a comment below.
Want more tips and advice for your awesome law practice? Check out Law Office on a Laptop, Second Edition: How to Set Up Your Own Successful Law Mobile Law Practice.