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Yes! Professional liability insurance (PLI) can provide your law firm with a defense in the event a claim is filed against you, whether an error was made or not. Should a claim occur, PLI coverage may provide you with access to a defense attorney seasoned in lawyer’s malpractice claims caused by: 

• administrative errors, 

• unintentional negligence, 

• missed deadlines, 

• alleged misrepresentation, 

• inaccurate advice, 

• alleged baseless charges, and so on. 

Access to this type of support when dealing with a malpractice claim can help eliminate the loss of time and money (and not to mention stress) that defending a claim requires. Having someone on your side to offer advice and answer questions is invaluable. 

Many states require lawyers to disclose whether they carry malpractice insurance. Some states may require clients to sign a written disclosure acknowledging that the attorney is practicing without professional liability insurance coverage. Requiring potential clients to sign these disclosures may cause them to question working with you. Or you may practice in a state that requires PLI. Oregon and Idaho, for example, currently require attorneys to carry professional liability coverage. Just more reasons why yes, you do need professional liability insurance. 

Lawsuits can happen, frivolous or not. Without adequate coverage protecting your firm, a lawsuit could be so costly that it leaves your business in ruins. 

Because professional liability insurance is written on a “claims-made and reported” basis, you will want to obtain coverage for your firm as early as possible in your legal career. 

“Claims-made and reported” means the claim must occur and be reported during the policy period. Your retroactive date, or prior acts date, is the date upon which you first obtained coverage. When a lawyer has prior acts coverage, malpractice issues that occur after the retroactive date are usually covered* as long as the matter was reported in compliance with the policy. On the other hand, any alleged malpractice that happened prior to the retroactive date would be excluded from coverage, even if reported during a current policy term. 

So, you will want to have coverage in place as soon as possible because you will need to have a policy in place when the error occurs and the claim is reported (or coverage may not apply). 

Many factors can determine your annual premium, and rates may differ between carriers. 

Some key premium factors are: 

• areas of practice, 

• state and county where you are located, 

• coverage limits and deductibles, 

• claims history, 

• the number of insured on the policy, and 

• the number of years of prior acts coverage being offered. 

Price vs. Value: Making Informed Choices When Shopping for Lawyers Professional Liability Insurance 

• Clerical errors 

• Conflicts of interest 

• Dabbling (taking cases outside your area of expertise) 

• Errors and/or omissions 

• Failure to disclose 

• Lack of communication with clients 

• Missed deadlines 

• Misunderstandings 

• Negligence 

• Taking on too much and not having the time to devote to the caseload properly 

Leading Reasons Attorneys Get Sued