Do you need professional liability insurance?
Claims activity against attorneys has steadily increased in each of the past two decades, with no reason to believe the pattern will end. Lawyers in all parts of the country, all size firms, and all areas of practice are at risk every year. Dealing with Read More
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Top Reasons Attorneys Get Sued
- 10) Negligence
- 9) Not following court orders
- 8) Not properly preparing for trial
- 7) Not telling clients about settlement offers
- 6) Failing to file a foreclosure action for a client after agreeing to do so
Approximately 6% of all attorneys in the U.S. are likely to face an allegation of professional liability in any given year. Claims activity against attorneys has steadily increased in each of the past two decades, with no reason to believe the pattern will end. Lawyers in all parts of the country, all size firms, and all areas of practice are at risk every year.
Typically, professional liability insurance policies are designed to cover lawyers and employees of the law firm acting on behalf of the firm (and, sometimes, lawyers currently with the firm who are sued over activities performed when with a different firm), and the firm itself, as specified in the policy. Often also included are predecessor firms; lawyers (including of Counsel attorneys) or employees no longer with the firm for actions taken while with the firm; and heirs, executors, administrators and other legal representatives and assigns of a named insured, or that insured’s estate.
Professional liability insurance pricing is determined by a number of factors. Generally, insurers start out with a base rate influenced by state-by-state experience. That rate is then modified by various factors reflecting the individual characteristics of the specific law firm, including areas of practice, past claims experience, risk management practices, other firm management and infrastructure factors, and the number of attorneys to be covered. The rate is further influenced by the limits and deductibles chosen and the breadth of coverage requested, including prior acts coverage, extended reporting periods, and tail coverage.
The amount of coverage you should purchase should be guided by your own philosophies about risk-taking, your financial wherewithal, and the types of risk you face in your practice. The answer is best determined through consultation with an experienced lawyers’ professional liability broker who is trained to help analyze the risks you and your firm face and to suggest the appropriate limits and deductible for your situation