An attorney or law firm can use legal professional liability insurance to aid in covering costs for claims against their legal services and to protect their clients in worst-case scenarios. However, legal professional liability insurance or malpractice insurance for attorneys will not cover certain situations that can arise in a legal practice. It will not cover fraudulent, malicious, criminal, or dishonest acts that might occur during client representation. Cases that arise between lawyers or employees within the same the law firms are not covered by legal malpractice insurance, nor will it cover damages that involve an enterprise belonging to the firm.
Some things that are covered under malpractice insurance for attorneys may involve portions of services that are routine within the law firm such as notary public, services rendered while acting as a title agent or trustee, or when acting as an officer, director, or member of a legal professional association. These are situations where legal liability insurance can be used to defer costs to the law firm. In cases where a client feels that they have not received the full benefit of the attorney’s services or were not represented properly, legal malpractice insurance helps to cover the costs of such claims.
On average, approximately 6-percent of the nearly one million practicing attorneys will need legal liability insurance due to claims filed against them for malpractice. While many times these are simple mistakes that involve negligence or a more serious mistake that can arise as a result of a client’s dissatisfaction, a law firm will benefit greatly from having acquired legal liability insurance. The annual cost of legal professional liability insurance is based on several factors surrounding the law firm, and the policy can be altered as needed; however, the cost that is deferred when claims are filed will cover the cost of the insurance.