Attorney Malpractice Insurance

It’s without a doubt true – any business needs some form of “malpractice insurance.” Whether it’s a service, a product, or even consulting. Why? Several reasons –

1.    Errors Causing Undesirable Consequences
2.    Misinformation
3.    Miscommunication
4.    Or Even “Revenge”

And particularly in the legal industry, revenge is a big one.

Take Criminal Law as an Example

Imagine an attorney legally representing a member of the Mafia but losing the case and causing that member to serve twenty years in jail.

If by chance the other members of the Mafia decide to not take things into their own hands and opt to pursue their matter legally (fat chance on that!) and file a malpractice lawsuit, malpractice insurance for attorneys would be a very necessary requirement for the lawyer who represented the member currently in jail.

The purpose of malpractice insurance for attorneys is to protect that legal business, for obvious reasons.

What is Attorney Malpractice Insurance Exactly?

Think of it as any other form of insurance, like –

1.    Auto Insurance
2.    Home Insurance
3.    Life Insurance
4.    Renter’s Insurance
5.    Health Insurance

It’s designed to protect the finances of any attorney malpractice insurance covers any settlement issues due to lawsuits, plain and simple. That needs to be made clear –

It’s not a means to dispute any lawsuit against an attorney malpractice insurancesimply takes care of the financial end of it. It’s basically saying, “yes, we know we made a mistake, so here’s a settlement offer for your troubles.”

Of course, every attorney malpractice insurance protects does pay what’s called a “premium,” same as any other insurance. And there are deductibles as well.

Do Legal Malpractice Lawsuits Happen Often?

Depending on the legal niche, most definitely. There are quite a few of them:

1.    Probate Law
2.    Estate Planning Law
3.    Bankruptcy Law
4.    Property Law
5.    Insurance Law
6.    Court Martial Law
7.    Family Law
8.    Mutual Law
9.    Business Law
10.    Personal Injury Law
11.    Wrongful Death Law
12.    Tax Law
13.    Copyright Law

And, of course, “Criminal Law.” Some of these don’t really see the light of day when it comes to a malpractice lawsuit against an attorney, but as already mentioned before with Criminal Law, suits do occur against the attorneys representing the accused and the job was rather lackluster, causing the accused to lose the case and go to prison, for example.

In addition, Personal Injury Law can get its fair share of lawsuits. But again attorneys malpractice insurance protects suffer no needless income loss in the event that a malpractice lawsuit is inevitable.

In some cases, even Wrongful Death Law can bring about some malpractice lawsuits.

What it all boils down to is the quality of service the lawyer provides. In any legal niche, if the client feels that the legal representation wasn’t up to par, that client can legally sue the lawyer for professional negligence. Plain and simple.

It surrounds the theory that just about anything can happen – and no lawyer is perfect, and no case will go exactly the way anyone will expect.

What Should a Lawyer Do About Getting Malpractice Insurance?

Do the research. And do it well.

A lawyer has to consider an insurance company that specializes in that type of policy, and for sure rates and deductibles do matter.

One thing many people have to realize is that being a lawyer is an entrepreneurial business. That means several things:

1.    A Lawyer’s Solely Responsible for Business Hours
2.    A Lawyer’s Solely Responsible for Taxes
3.    A Lawyer’s Solely Responsible for Income

It simply means that a lawyer can choose just how hard to work in and out of that courtroom. A lawyer doesn’t get taxes taken out of any paycheck either, so taxes are filed separately. And rates or fees are completely decided by the lawyer: and how much income depends on how much work a lawyer can obtain.

So in considering that, attorney malpractice insuranceshould only be offered when attorneys are well established, a good clientele base, consistent income. Typically that would happen when an attorney joins a firm already obtaining malpractice insurance for that particular reason. Then and only then malpractice insurance – attorney obtained – can be a little less of a hefty expense.

What Does Malpractice Insurance Not Cover?

Attorney malpractice insurance protects often still have to face consequences for several types of actions, which include:

1.    Fraud
2.    Criminal Activity
3.    Malicious Intent
4.    Dishonesty
5.    Services Rendered to a Business Owned or Controlled by the Lawyer or Firm
6.    Services Rendered as a Fiduciary
7.    Lawyer Commits Bodily Injury or Property Damage
8.    Claims Regarding Two Insured Individuals Within the Same Law Firm

Some of these are pretty obvious when you think about it – but we get into confusing waters with the last few, although considering the details may make it clear.

attorneymalpractice insuranceprotects can’t cover anything fraudulent an attorney may do, nor can it cover criminal activity. If a lawyer is shown to be malicious in any way during the particular case, dispute, or lawsuit, a client may sue without any coverage provided to the lawyer.

Dishonesty is also a non-coverage, for obvious reasons. When it comes to attorney malpractice insurance, of course – any errors or happenings beyond the control of the attorney would be covered. But a lawyer who chooses to lie for whatever reason is professionally disreputable – and if the lie directly affects the outcome of any case, a client may sue.

To prevent any kind of circulating, a law firm isn’t protected by malpractice insurance – attorney within that law firm provided – when it involves a claim on services for a business directly involved with the firm. In other words, if the client actually operates outside the firm, the insurance can cover the claim.

Even under probate cases, malpractice insurance can’t cover claims for anything regarding the loss of funds under estate planning, or a process that went awry when determining the Will and Testament or Trust of a client, or any such matter involving that legal niche.

The last two are obvious as well.