Every November, the Illinois Bar Administrator sends a notice of registration requirements to all active Illinois attorneys, beginning the registration process, which is due by January 1.
A crucial part of the registration process is Lawyers Liability Insurance (legal malpractice insurance). Under Illinois Supreme Court Rule 756(e), practicing attorneys must either carry legal malpractice insurance or complete the Proactive Management Based Regulation (PMBR) Self-Assessment Program.
Understanding the ins and outs of legal malpractice insurance requirements is essential for compliance. Knowing your options not only ensures you meet Bar standards but also allows you to make informed decisions for your law practice.
Illinois Supreme Court Rule 756(e)
Rule 756(e) emphasizes professional responsibility by mandating attorneys to either:
- Maintain legal malpractice insurance (Lawyers Professional Liability Insurance)
- Complete the Proactive Management Based Regulation (PMBR) Self-Assessment Program
This requirement protects both lawyers and clients, establishing a standard of professionalism and accountability in legal services.
Carrying Legal Liability Insurance as an Attorney
Maintaining liability insurance in any profession is important because, as a licensed professional in the field, you are held to a higher standard of expertise. Legal professionals help clients navigate some of their most vulnerable moments, and the judicial system can be complex for anyone without legal training.
Liability (Errors and Omissions) Insurance is designed to:
- Protect the insured from financial devastation
- Safeguard and defend the insured’s professional reputation and career
- Provide strong defense counsel, saving time and energy
Many attorneys believe liability insurance is “too expensive”, but it only becomes costly if it isn’t uniquely tailored to your practice. Make sure your policy’s coverage and benefits meet your specific needs. Some carriers also provide free CLE, risk management resources, and other perks beyond the policy itself.
Understanding how Lawyers Liability Insurance works is key to purchasing the right policy for your law practice. Learn how claims-made and reported policies differ and use a checklist to help you choose the right coverage.
Liability Insurance Requirements (Rule 722)
Rule 722 requires a minimum of $100,000 per claim and $250,000 aggregate for professional liability insurance for the following entities:
- Corporation
- Association
- Limited Liability Company
- Registered Limited Liability Partnership
The minimum limits must be multiplied by the number of attorneys in the firm, but need not exceed $5,000,000 per claim and $10,000,000 aggregate.
For example, a 3-attorney firm must carry $300,000 per claim and $750,000 aggregate. If the firm grows to six attorneys, the required coverage increases to $600,000/$1,500,000. Note that carriers may offer slightly different limits, so ensure your policy aligns with Rule 722.
Calculating Adequate Coverage When It Comes to Limits of Liability
Proactive Management Based Regulation (PMBR) Self-Assessment Program
Attorneys who choose not to carry legal liability insurance must complete a four-hour PMBR Self-Assessment Program every two years.
This program is:
- Provided free of charge by the ARDC Administrator
- Centered on professional responsibility requirements
- Divided into four modules, each qualifying for CLE credit
- Available to insured attorneys as well, who may take it to earn MCLE credit
Upon completing each module and its assessment, attorneys receive a Certificate of Completion for Illinois MCLE credit.
Speaking of CLE, if you’re interested in more free ways to earn CLE credits, sign up for these upcoming webinars!
When Does Rule 756(e) Apply?
Illinois Supreme Court Rule 756(e) applies to any lawyer with at least one private client.
Failure to comply can result in being removed from the master roll or Roll of Attorneys. Reinstatement requires compliance with Rule 756(e) and completion of any additional outstanding registration requirements.
Exempt attorneys include:
- Government lawyers
- Public defenders
- Prosecutors
- Corporate in-house counsel
- Attorneys with retired or inactive status
Promptly Submitting Information Changes
Rule 756(c)(5) requires attorneys to report changes to their registration information within 30 days.
This is important because the Administrator may conduct audits at any time to verify accuracy, including insurance information. Promptly updating changes ensures compliance and helps maintain the integrity of the registration process, reducing the risk of penalties or issues caused by discrepancies.
Dangerous Misconceptions of Being Uninsured
Some attorneys choose to forego liability insurance because they believe:
- Being well-liked by clients will prevent lawsuits
- Having insurance makes them a target
Both are misconceptions.
Lawsuits can happen unexpectedly, even from non-clients. Attorneys are sometimes named in broad claims, and even without a clear error or omission, lawyers can still face lawsuits.
When an unexpected risk becomes real, and you’re left handling a lawsuit alone because you’re uninsured, who will support you in defending your reputation and avoiding financial catastrophe?
Choosing a Legal Malpractice Carrier
While cost matters, quality should be viewed as an investment, not an expense. Choose a carrier that is:
- Highly rated and financially stable
- Experienced in Lawyers Professional Liability Insurance
- Able to offer additional resources such as risk management tools, CLE webinars, and law firm growth resources
Ensure your policy is customized to fit your unique needs. Use checklists or worksheets to simplify the selection process, so you don’t end up with a policy that leaves your practice vulnerable.
You can also download our comprehensive guide to help you ask the right questions when shopping for Professional Liability Insurance.
Wrapping Up
Illinois attorneys must either:
- Carry legal practice insurance, or
- Complete the PMBR Self-Assessment Program every two years
While PMBR is free and provides MCLE credit, it is strictly a proactive measure. Lawyers Professional Liability Insurance requires an annual premium, but can protect your law practice from financial devastation in the event of a claim.
Remember, lawsuits can be filed by clients or non-clients, regardless of merit.
Insurance is the transfer of risk. By insuring your law practice, you shift potential exposures to the insurance company. Many carriers offer valuable tools such as risk management resources, law firm growth materials, and more to help you reduce errors and grow your practice responsibly.
Illinois created these rules to protect clients and encourage attorneys to adopt best practices. Regardless of your state or regulatory requirements, maintaining Lawyers Professional Liability Insurance is one of the most effective ways to protect your careers, your firm, and your clients.
