Lawyers Professional Liability insurance

Frequently Asked Questions (FAQ)

• How do I know I have the right coverage for my business?

  Embroker has published a bunch of great resources to help you on your insurance buying journey. Check out the Embroker Resource Hub for articles on coverage, guidance on insurance costs, and what you’ll need to get a quote.

  You can also connect with a broker at any time to get help identifying your coverage gaps.

• Are there additional coverages available with LPL insurance?

  Legal Professional Liability will only provide insurance coverage for your firm in legal capacities. This means that attorneys acting as board members, business partners, or occupying other roles won’t be covered for their errors and omissions, which is why looking into directors and officers insurance is also a good idea.

  Employment-related lawsuits related to discrimination, harassment, failure to promote, and wrongful termination are to be covered by employment practices liability insurance (EPLI), and therefore don’t enter the scope of legal malpractice coverage.

  Legal malpractice policies will typically exclude claims arising out of bodily injury and property damage, as these claims are typically covered by general liability insurance. One important aspect to note is that breaches of fiduciary duty will also be excluded from a legal professional liability policy.

  Also, any claims where the insured firm was aware of a potential claim but didn’t disclose this information before the policy took effect won’t be covered.

• Who benefits most from LPL insurance?

  All attorneys need legal malpractice insurance, even though they hope to never have to use it. 80% of lawyers get sued at some point in their career, and you don’t want to face a lawsuit without legal malpractice insurance. However, certain areas of practice carry a considerably greater amount of risk.

  Attorneys practicing in fields of intellectual property, loan modification, trusts, and personal injury cases are considered to be at higher risk by underwriters.

  Working with trusts and estates invariably involves sensitive and personal matters, which makes attorneys who practice in these areas open to claims of legal malpractice from unhappy family members and non-client beneficiaries.

  Additionally, while malpractice claims are subject to statute of limitations in most jurisdictions, many contain an exception specifically applicable to trusts and estates attorneys. (The statute of limitations is extended until the death of the original client).

  Personal injury cases carry the risk of missed deadlines or “failure to calendar.” Additionally, clients often have extremely unrealistic expectations about the potential payouts they’ll receive.

  Attorneys working on loan modifications typically work with a very great number of clients. This fact, combined with stringent government regulations, means they are at a significantly higher risk of being sued for alleged malpractice.

  Embroker knows that your time is precious, which is why you can get your legal malpractice insurance quote in under 10 minutes with us by telling us more about your business.

• Why do you need LPL insurance?

  The legal profession is highly regulated, and there are clear professional standards and expectations that all attorneys must adhere to. If a client loses their case and feels that their legal representative has failed to meet those standards, they can take legal action and allege that they were victims of legal malpractice.

  Should the client prove malpractice and win, the attorney would be required to repay them for all the potential funds they would have received had they won the original case. However, even if the allegations are entirely baseless, merely dealing with a claim can eat up a lot of time and money.

  In the event of an expensive lawsuit, the damages incurred could easily lead to the bankruptcy of your firm. Legal malpractice insurance precludes that possibility by covering both the costs of legal defense and possible damages awarded.

  This is why, when dealing with potential legal malpractice claims, one can never be too cautious. It’s always a good idea to invest in lawyers professional liability insurance should you ever find yourself on the wrong side of a lawsuit.

  Some states also require attorneys to carry legal malpractice insurance or disclose to clients that they do not have a policy. Read our legal malpractice insurance requirements by state article to learn about your state’s rules.

• What does LPL insurance cost?

  There are many different factors that go into determining the premium a law practice will have to pay in order to secure the right lawyers professional liability insurance, including:

  • Size of the firm: Larger practices, specifically those with a higher number of attorneys, will typically pay higher premiums.
  • Areas of practice: Certain areas of practice have more risks than others. Attorneys working on potentially volatile cases involving securities, medical lawsuits, international law, or intellectual property can expect to pay a lot more to be adequately protected.
  • Location: Lawyers practicing in metropolitan areas such as New York or Los Angeles can expect to pay a lot more for insurance when compared to those located in less-populated areas.
  • Step rating: The length of time each attorney has been with the company will affect the cost of legal malpractice insurance. This is called the step rating, and insurers use it to measure the potential exposures that occur as lawyers handle more and more cases for the firm. A lawyer’s premium will be at its lowest during the first year with a firm, and it will reach full maturity in the sixth year.
  • Claims history: Previous claims can increase your premium.
  • Policy limits and deductible: Higher coverage limits generally result in higher premiums, while a higher deductible can lower your premium.