Over the past several years, states across the country have been tightening the rules around professional liability insurance for lawyers. Now it is Ohio’s turn.
Beginning in 2025, Ohio attorneys in private practice must either carry professional liability insurance or formally disclose to clients that they do not.
These changes are important for all legal professionals, regardless of where you are in your legal career. Embracing this knowledge can empower you to navigate your path more effectively and comply with the evolving Rules of Professional Conduct.
Professional Conduct Rule 1.4 addresses proper communication between attorneys and clients and outlines what must be disclosed to ensure that a client is properly informed and updated on legal matters.
Under this Rule, a lawyer in private practice is required to inform a client if they do not maintain at least $100,000 per claim and $300,000 aggregate in Lawyers Professional Liability Insurance. Notifying a client must be done at the time of engagement or any time after the engagement if the lawyer becomes uninsured, or the coverage is terminated or lapses.
The notice must be provided to the client on a separate form, and the client is required to sign the acknowledgment. A copy of the signed notice must be kept for five years after the termination of representation.
The state of Ohio is essentially recommending that all attorneys and law firms carry Professional Liability (Legal Malpractice) Insurance by requiring uninsured lawyers to formally notify each client whenever they are not covered and to obtain a signed acknowledgment from the client.
“Pursuant to Rule 1.4 of the Ohio Rules of Professional Conduct, I am required to notify you that I do not maintain professional liability (malpractice) insurance of at least $100,000 per occurrence and $300,000 in the aggregate.” *
“I acknowledge receipt of the notice required by Rule 1.4 of the Ohio Rules of Professional Conduct that [insert attorney’s name] does not maintain professional liability (malpractice) insurance of at least $100,000 per occurrence and $300,000 in the aggregate.” *
*The notice and acknowledgement above are from the Ohio Rules of Professional Conduct, a resource document provided by the Supreme Court.
Would you want to disclose, sign, and have your client sign off on that acknowledgement?
Attorneys who practice in a legal professional association, corporation, legal clinic, limited liability company, or limited liability partnership must comply with additional regulations found in the Supreme Court Rules for the Government of the Bar of Ohio, under Rule III. Legal Professional Associations Authorized to Practice Law, Section 4. Financial Responsibility.
The Rule states that such professionals must maintain adequate professional liability insurance or another form of adequate financial responsibility for “any liability of the firm arising from acts or omissions in the rendering of legal services by an officer, director, agent, employee, manager, member, partner, or equity holder.”
Section 4.A.1 defines “adequate professional liability insurance” as one or more policies that insure the legal professional association, corporation, legal clinic, limited liability company, or limited liability partnership in the amount of at least $50,000 per claim (excluding the deductible) per practicing attorney with the firm, and $100,000 aggregate (per policy period) for each practicing attorney with the firm, with a maximum requirement of $5,000,000 per claim and $10,000,000 aggregate in excess of the deductible.
Section 4.A.2 defines “other form of adequate financial responsibility” as having funds in the amount of no less than the amounts outlined in Section 4.A.1 to satisfy any legal liability claim arising from legal services. These funds must be in the form of a “deposit in trust of cash, bank certificate of deposit, or United States Treasury obligation, a bank letter of credit, or a surety bond”.
Each member, partner, or other equity holder subject to this Rule can be “jointly and severally liable for any liability of the firm”. As a result, it is both responsible and appropriate to request confirmation of compliance with Rule III, Section 4 of the Supreme Court Rules for the Government of the Bar of Ohio when holding such a status as a legal professional association, corporation, legal clinic, limited liability company, or limited liability partnership.
If you decide not to insure your law practice with professional liability insurance, you are required to do more than just inform your client and obtain a signed acknowledgment.
Lawyers who decide not to maintain Professional Liability Insurance must complete a free, online course on ethical law practice management known as the PMBR (Proactive Management-Based Regulation).
However, there are a few exceptions to this regulation, as outlined in Supreme Court Rules for the Government of the Bar of Ohio, Rule VI 1.B.
is also exempt from the PMBR requirement.
There are many reasons attorneys decide not to purchase liability insurance:
  “My clients love me! They won’t care that I’m uninsured, and they won’t sue.”
  “I only help friends and family with legal matters. They’re not going to sue me.”
  “Insurance coverage will just make me a target for lawsuits.”
All these are understandable thoughts, but they are unrealistic justifications for not insuring your law practice.
The truth is, there is a long list of reasons attorneys get sued, and lawsuits arise when least expected. Taking risk management precautions can help you avoid malpractice claims, but best practices can’t prevent disgruntled or unhappy people from filing a lawsuit.
Even if your clients are pleased with your service, someone they know may disagree and sue you for alleged wrongdoing. Attorneys are sometimes named in broad claims where every lawyer, even remotely involved, is listed. Even if there is an absence of a clear legal error or omission, lawyers can still be sued.
What happens when the risk you didn’t expect to face becomes real, and you’re left detangling a lawsuit on your own because you’re uninsured? Who will stand by your side to help defend your good name and prevent financial devastation?
Saving money is important to everyone, especially business owners. However, it is easy to forget that the cost of quality products is not an expense; it’s an investment.
Look for an insurance company that is highly rated and financially stable. Seek out a provider with longevity in the market, focused underwriting, and quality coverage options. Make sure the insurance company you choose can adequately protect your law practice.
Selecting a legal malpractice insurer involves evaluating their coverage options, reputation, and pricing to find the best fit for your needs.
It’s critical to ensure that your insurance policy is tailored to fit your unique needs. We offer a worksheet to simplify the complexities of selecting coverage, so you don’t end up settling for a policy that leaves your practice exposed.
You can also download our comprehensive guide to help you ask the right questions when shopping for Professional Liability Insurance.
When shopping for coverage, who you work with matters. You want a knowledgeable and experienced agency on your side.
Don’t just find an access point to a carrier you have your eyes on, find a partner. Choose an agency that will work with you, listen to your concerns, and be attentive to your insurance needs.
It’s also crucial to work with an agent who is well-versed in Lawyers Professional Liability Insurance. This line of coverage differs significantly from other types of insurance, and even a simple oversight or mix-up could result in a gap or complete loss of coverage.
In short, Ohio attorneys must now either carry legal malpractice insurance, or if they choose to go without it, they must complete the PMBR curriculum and have each client sign a formal acknowledgement stating they’ve been notified of the lack of insurance.
Ohio is enforcing these rules to help protect clients. No matter what state you’re in, it’s wise to protect your career, your law practice, and your clients by maintaining Lawyers Professional Liability Insurance.
eBooks: Professional Liability 101 & An Overview of Legal Malpractice
Claims-Made Vs. Occurrence Insurance Policies Explained
Price vs. Value: Making Informed Choices When Shopping for Lawyers Professional Liability Insurance
Calculating Adequate Coverage When It Comes to Limits of Liability
Professional Liability Insurance Scoring Checklist
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