Being a lawyer does not mean you can’t ever be sued. Even though you work to the highest standards of the legal profession, sometimes you just can’t get the result your client wants, and every once in a while, even the most diligent and detail-oriented attorney can make a mistake.
The American Bar Association reports that four out of five lawyers will get sued for malpractice at some point in their career, and 70 percent of malpractice claims are filed against small firms of one to five lawyers. So whether you’re a solo practitioner or a big law firm, you require a trustworthy partner who can offer your firm the appropriate insurance coverage.
Lawyers professional liability insurance, also called legal malpractice insurance, provides financial protection in the event a client or another party claims your negligence, errors (real or perceived), or omissions caused them harm. A client could try to sue your firm if they believe your conduct or counsel caused them to lose their case or put them in precarious position.
Common reasons given for legal malpractice claims include:
- Filing incorrect or late paperwork
- Insufficient research that created holes in a client’s case
- Including incorrect information in a case or document
- Not getting sufficient consent from the client before acting
- Alleged conflicts of interest
- Not following all of the instructions when drafting a response
- Not keeping the client up to date on their case
Your professional liability insurance covers claims related to your primary practice of law, and the policy covers all of the attorneys in your firm. This policy can also cover tasks incidental to your law practice, such as acting as a notary public, a title agent, an executor to a will or trust, or a member of a relevant professional organization. You may face higher premiums depending on your area of practice, as insurance carriers know that some come with a higher risk of malpractice claims. These include intellectual property, estates, personal injury, residential real estate, and entertainment.
It is important to note that certain things are generally excluded from professional liability insurance coverage. These include:
- Fraudulent or criminal acts on your part
- Activities you knew could result in a malpractice claim beforehand
- Claims where both sides are employed by the same law firm
- Legal services for businesses your or another attorney in your firm own
- Retirement plans covered under ERISA
- Bodily injury and property damage. These are covered instead under general liability insurance.
Here in Illinois, state law does not mandate that attorneys carry professional liability insurance. However, rule 756 of the Illinois Supreme Court strongly encourages it by requiring law firms to report each year what insurance coverage they have, and if they don’t have coverage, they must complete a four-hour online assessment of their firm’s operations to highlight potential vulnerabilities. And clients are more likely to trust an attorney with the proper professional liability insurance coverage.
Unfortunately, even the most vigilant law firms sometimes fall victim to costly malpractice claims. Given how often these claims are submitted, any law firm, whether a single attorney or a big law firm, would be wise to invest in a good insurance plan. Contact the lawyers professional liability advisors at Kamm Insurance Group to ensure you and your law firm are protected with the proper insurance coverage.