Give The Ultimate Justice To Your Safety: Invest In The Best Legal Malpractice Insurance

TLTR: This article explains how legal malpractice insurance works, its limitations, where it’s required, and more.   All of us are prone to making mistakes. As a lawyer, you chiefly need to protect yourself from any serious professional errors with legal malpractice insurance.

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Basics Of Legal Malpractice Insurance

Legal malpractice insurance is a specialized type of professional liability insurance or malpractice insurance. Basically, the policy is designed to protect legal professionals from events that may lead to a lawsuit that accuses them of incompetence or making serious mistakes.

According to the Insurance Business Magazine, malpractice claims in the legal sector are rising rapidly. Evidently, the number of claims which require multimillion-dollar payouts are dramatically increasing.

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How Does Legal Malpractice Insurance work?

By and large, the policy is usually written as a “claims made” policy.

A “claims made” policy means that claims made during the time the policy is active will be covered. For instance, let’s say the case in question took place in 2018, and your policy covers you from 2020 till 2025. If the claim is made in, say, 2021, the policy will have you covered.

Legal malpractice insurance generally works like lawyers insurance. The policy covers you for errors and omissions that may come up in your area of practice. Many policies also cover incidental activities such as:

  • Acting as an executor
  • Acting as a trustee
  • Working as a notary public
  • Knowingly acting as a member of a professional organization that you’re not actually a part of
  • Serving as a title agent

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Some Limitations

Limitations of the policy include:
  • Legal services that are given to a third party that is controlled/owned by the insured lawyer
  • Services provided as fiduciary but are under the Employee Retirement Income Security Act (ERISA)
  • Third-party (property or bodily) damage caused by the insured lawyer
  • Claims between lawyers who are also colleagues
  • Provable malicious, criminal, or dishonest acts
legal malpractice insurance requirements

Requirement of Legal Malpractice Insurance

Many practicing lawyers and attorneys believe that legal malpractice insurance should not be mandatory in order to practice law. However, as explained in The Indiana Lawyer, states such as Idaho and Oregon require professionals to carry the policy to practice. California and Washington are also actively considering implementing the law. Those in favor say that clients might not get relief if a lawyer fails to procure finances.

Last but not least

When you get this policy, you’ll likely have many questions for your insurance company. Here are some of the most important ones:

  • What are the limits of the coverage?
  • Does the policy cover your line of practice?
  • What is deductible under the policy?
  • Is there a specific term for the current coverage?
  • Will there be transparency if their services are no longer applicable to you?
  • Can they provide you with a Certificate of Insurance?

Are you looking for a seasoned insurance agent to answer all these questions for you? Check out our agent directory today!

Do you have more questions about the coverage? Leave us a comment below, and our experts will get back to you!

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