What the Price Can Tell You When Shopping for Lawyers Professional Liability Insurance

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

Price vs. Value Lawyers Liability Insurance

Law Firms, Solo Attorneys

What the Price Can Tell You When Shopping for Lawyers Professional Liability Insurance

Shopping for insurance is widely performed by seeking the lowest price. We want to help you understand why this common practice could be detrimental when it comes to securing Lawyers Professional Liability Insurance for your law practice.

Attorney Malpractice Insurance is very different from other lines of insurance. The price of your insurance quote can reveal the details of what you are actually getting for your money, from the triggers that activate the policy to the available coverages and potential exclusions from coverage.

A "great deal" or "substantial discount" can come at a great cost. We have seen attorneys renew coverage with a "better price" when in reality, they are getting only what they pay for. Most often, they are purchasing lesser coverage or losing coverage they've invested in over the years. Sometimes, as a result of the infamous online 'instant quoting', attorneys are erroneously purchasing the wrong kind of insurance policy altogether.

Always Question a Very Low Lawyers Liability Quote

The price of a policy can serve as a valuable indicator of what kind of policy you are being offered. When gathering insurance quotes from agents and online platforms, your vigilance can protect you from purchasing an unsuitable policy. If you receive an offer for a liability policy priced under $500, we strongly encourage you to take a second and scrutinize the details.

When obtaining quotes exclusively online with no human interaction, it can be easy to inadvertently receive a bid for the wrong type of insurance. We've encountered instances where attorneys were impressed by a $500 policy offer they received online and were inclined to accept it. However, upon closer inspection, they realized it was a General Liability policy rather than Lawyers Liability. This underscores the importance of understanding which questions should and should not be included on a Lawyers Liability Insurance application.

What Questions Are Unrelated to Lawyers Liability Insurance?

The questions on the insurance application can provide hints about the policy you're applying for. Paying attention to this can help you ask the right questions to confirm you are applying for and purchasing the insurance coverage you need.

Here are some questions that are unlikely to appear in a Lawyers Liability Insurance application:

The square footage of your office
Annual payroll
Employer ID Number (FEIN)
Company vehicle information
Leasing information
Prior cyber incidents

What Are Questions Typically on a Lawyers Liability Insurance Application?

There are several questions that are necessary to obtain in order to underwrite a lawyers liability insurance policy:

Areas of practice
Number of attorneys
Attorney bar number or admittance date
Law office locations
Risk management procedures
Legal malpractice claims history
Estimated annual revenue

While some questions may seem irrelevant to you, they may be important to underwriters. If you ever have questions about the relevance of certain application questions, ask your agent. Your agent should be able to explain why the underwriter needs this information and how it relates to evaluating the risk for Lawyers Professional Liability Insurance.

When Competing Offers are Vastly Different in Price

If you are shopping for attorney malpractice coverage, it's vital to look past the price differences when comparing offers.

A quote for $1,000 could only be providing $100,000 limits while the $2,000 quote is offering $500,000 limits. Additionally, a quote for $500 could actually be for General Liability rather than Lawyers Liability Insurance or a policy that limits your prior acts coverage from what you already have. Furthermore, a $1,500 difference in price could signify the contrast between prior acts coverage and retro-inception or limited prior acts coverage.

There are numerous coverage variables that must be considered when evaluating different insurance offers.

We're not saying that price isn't important when comparing offers. However, it is equally important to consider what the insurance carrier is offering you and ensure it aligns with the coverage you are seeking.

Does the carrier offer CLE opportunities? Do they offer risk management services and resources? Will you have unlimited access to those services, or is there a 2-hour cap on access? Is the carrier easily accessible to you or your agent? What is their financial stability? Is their policy form of sufficient quality for your law practice and insurance needs?

Don't let a bottom-low price keep you from asking the questions that matter.

Is a Policy Under $1,000 Possible for Lawyers Liability Insurance?

Yes! However, always inquire about premium justification.

Newly admitted attorneys embarking on the solo practitioner journey may qualify for special programs. Some carriers offer such programs where the premiums start at $600. This initiative aims to provide financial support to attorneys as they launch of their new practice.

Wrapping up

While it is essential to have a budget for Lawyers Liability Insurance, price should not be the sole determining factor.

Law is dynamic, and your professional liability insurance should be tailored to fit your practice. If it's not, the money you spend on insurance is wasteful.

Look beyond the quoted premium and evaluate the value of the policy. Consider the benefits of insuring your law practice with a particular carrier. Ask the questions necessary to ensure your purchase aligns with your needs and those of your law firm.

Approach your search for Lawyers Professional Liability Insurance with the goal of safeguarding your legal career and securing the financial stability of your practice for the long term.