Insurance

Definition: Malpractice insurance, also known as professional liability insurance, protects lawyers against claims of negligence, errors, or omissions in the delivery of legal services.

Coverage: It typically covers legal defense costs, settlements, and damages awarded in a malpractice lawsuit.

Practice Area: Different areas of law have varying levels of risk. Understand how your specific practice area might influence our exposure to malpractice claims.

Client Base: Consider the nature and size of your clients, as complex cases or high-value clients may increase your risk.

Coverage Amount: Choose a coverage limit that reflects the potential exposure to claims based on your practice size, type, and client base.

Claims History: Consider your firm’s or practice’s claims history, if available, to assess potential risks.

Exclusions: Understand what is excluded from coverage, such as certain type of claims or activities.

Deductibles: Review your insuring agreement to understand your obligations for payment of deductibles.

Claims-Made vs. Occurrence Policies: Claims-made policies cover claims made during the policy period, while occurrence policies cover claims arising from incidents that occurred during the policy period, regardless of when the claim in made.

Extended Reporting Endorsements (ERE): Consider adding ERE (tail coverage) to extend the period during which you can report claims after your policy expires or is cancelled.

Cyber Liability Insurance: Given the increasing risk of cyber threats, consider coverage for data breaches and other cyber risks.

Mentors and Peers: Talk to experienced lawyers and mentors to gain insight into their insurance experience and recommendations.

Policy Review: Regularly review your policy to ensure it still meets your needs as your practice grows and evolves such as new practice areas.

Practice Changes: Update your coverage if you add additional practice area or if there is significant change to your client base or business structure.

Record Keeping: Keep detailed records of your insurance policy including coverage limits, endorsement, and any correspondence with your insurer.

Risk Management Practices: Implement effective risk management practices to minimize the likelihood of claims, such as thorough client communication, proper documentation, and adherence to legal ethics and rules of professional conduct.