Summary: Even the most experienced attorney can make a mistake that can lead to a costly malpractice lawsuit. Learn more about what lawyers professional liability (LPL) insurance covers and why law firms need it to protect themselves from risk. Professional Liability for Law Firms
Lawyers professional liability (LPL) insurance, also known as errors and omissions (E&O) coverage, provides law firms with protection from costly malpractice or negligence claims. Clients may
file lawsuits against their attorneys for certain mistakes, such as misfiling documents and other types of oversights that can result in major payouts from the law firm. Professional liability insurance generally covers certain legal costs, including financial loss incurred by third parties that arise from acts, errors and omissions when providing professional legal services.
What Does Lawyers Professional Liability Insurance Cover?
Every business faces risks engaging in its daily operations. And, any business that provides a service to clients should have professional liability coverage – not just law firms but also real estate agencies, insurance agencies and other types of service firms. Once a law firm agrees to accept a potential client’s case, if the results fail to satisfy the client or the law firm makes a mistake, the client could sue the law firm, citing negligence.
Eighty percent of lawyers face getting sued at some point during their careers, even when they have seemingly done everything correctly. For example, a client may be unhappy with their settlement and elect to pursue additional funds from the law firm. In opposition, the law firm may inadvertently fail to timely file a client’s case or file it in the wrong jurisdiction. If the client is able to prove the law firm committed malpractice, the firm may be required to indemnify the client all the funds they would have received, barring the law firm’s error. Some of these types of expensive lawsuits can completely bankrupt the firm or deplete the individual attorney’s assets.
For lawyers, professional liability insurance covers the following types of claims:
- Legal malpractice, such as allegations contending the firm failed to perform its duties ethically and/or professionally. Examples include negligent advice leading to an SEC violation or exposing the client to a perceived conflict of interest;
- Missing deadlines by failing to timely file a case according to the laws of a particular state or jurisdiction. This is especially common in personal injury matters;
- Breach of contract – the attorney allegedly fails to honor the signed retainer agreement or engagement letter he/she provided to the client.
Specifically, AmTrust’s lawyers professional liability (LPL) coverage highlights include:
- Non-admitted product tailored for each individual risk
- Broad definition of Professional Services
- Broad definition of Insured, including Independent Contractors
- Disciplinary Proceedings Coverage
- Personal Injury Coverage
- Pre-Claim Assistance and Expense Reimbursement
- Pre-approved Defense Counsel for Select Firms
- Subpoena Coverage
- And much more
How Much Does Lawyers Professional Liability Insurance Cost?
Like other types of insurance coverage, many factors determine how much a policy will cost. The location of the law firm is one example, as insurance may be more expensive in certain metropolitan areas or even some states. Areas of practice involving greater risk, such as law firms handling securities, intellectual property, or medical malpractice cases may increase the premium being charged. The number of prior claims and the severity and degree to which the law firm was at fault may also increase the cost of insurance. Likewise, firms that have not had any claims filed against them tend to see lower rates.
Insurance for Lawyers from AmTrust E&S
AmTrust E&S PRO understands that a small error or oversight can escalate into a costly lawsuit in today’s increasingly competitive legal environment. Our
Lawyers Professional Liability (LPL) Insurance offers flexible, customizable protection for law firms with greater than five attorneys that do not fit the box of standard admitted markets due to their area of practice or claim history. Our experienced underwriting team always works to find solutions for law firms in the non-admitted market.
Find a broker or to request more information, please
contact us today.
This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.