Lawyers professional liability insurance is errors and omissions (E&O) insurance for attorneys, law firms, and other professionals in the legal industry, including mediators and paralegals. Professional liability insurance protects attorneys from claims arising from mistakes or negligence that results in client damages. Policies start around $2,000 annually for attorney professional liability insurance.
As a lawyer, you are well-versed in the law and probably see first-hand the many off-the-wall lawsuits being filed every day. While your job is to help people with their own legal protection, lawyers professional liability insurance is important for you to protect yourself and your practice from accidental errors and claims against your professional work. AP Intego makes getting the right protection for lawyers quick and easy.
Lawyers Professional Liability Insurance Providers
The best business insurance companies that provide lawyers professional liability insurance are providers have diverse coverage options for private practice attorneys as well as major law firms. Risks vary depending on the size and type of law you practice. The best carriers understand this and build policies to mitigate these risks.
Top Lawyers Professional Liability Insurance Providers
|AP Intego||(Best overall) Midsized law firms with junior partners and interns presenting multiple levels of exposure|
|Growing law firms adding new partners exceeding 20 professional attorneys|
|Travelers||Malpractice attorneys working with professionals in the medical industry|
|CNA||Attorneys in highly litigious regions who need policies ready to defend frivolous claims|
|Hiscox||Sole practitioner estate planning attorneys working with families on long-term plans|
Some of the top attorney professional liability insurance providers include AP Intego, The Hartford, Travelers, CNA, and Hiscox.
AP Intego is an online insurance broker with a network of providers across the nation. AP Intego has an online portal making shopping for some of the best professional liability insurers such as Travelers and AmTrust. AP Intego effectively walks a business owner through the application process quickly, helping attorneys get legal malpractice insurance.
AP Intego is a great choice for midsized law firms that have multiple partners and junior attorneys. More junior legal professionals on staff increases the need for oversight and thus the overall risk that a law firm has regarding professional liability. AP Intego can find the right carrier to serve this need through its partners.
The Hartford is a national insurance carrier with very detailed policies built around specific industry risks. The Hartford prides itself in providing more value in every policy when compared to other carriers. This carrier offers all lines of commercial insurance including one of the most comprehensive business owner’s policies (BOPs) in the industry.
The Hartford is the right choice for growing law firms that need professional liability insurance. The Hartford has two distinct policies: one for firms with less than 20 attorneys and one for those with more than 20 attorneys. Breaking the policies down not only provides more accurate pricing but increases the coverage in the right areas based on the firm’s size.
Travelers is a national carrier that offers all lines of commercial insurance through its network of brokers. Travelers bases what insurance policies are necessary on the business industry professionals’ and niche businesses they serve so to assist in proper underwriting and claims adjustment. This commitment to understanding business operations makes Travelers a business insurance leader.
Travelers is a great choice for attorneys that work with malpractice medical cases. Travelers has an extensive network of medical insurance providers due to its strength of workers’ compensation coverage. This internal knowledge of medical malpractice gives them specific insight into the risks of medical malpractice attorneys.
CNA is one of the largest insurance carriers in the world with the ability to write every policy any small business owner needs, even with highly specialized underwriting guidelines. Because CNA insures major corporations globally, it is uniquely positioned to understand the risks to all businesses dealing with cybersecurity and data breaches.
CNA is a good choice for a law firm finding it difficult to find the right legal malpractice insurance. CNA is the largest provider of lawyer professional liability insurance in the nation and can place policies even when there are previous claim circumstances that would otherwise make a law firm hard to place for insurance.
Hiscox is a small business insurance specialist with an easy-to-use online interface that makes the application and purchasing process easy for small business owners. Hiscox offers all lines of insurance products for businesses with a focus on addressing the needs of independent contractors and microbusiness owners.
Hiscox is a good fit for independent law practices working in legal areas where litigation is lower, such as family estate planning and trust establishment. Hiscox focuses on the reduced liability in small practices due to the excess quality control the firm owner has in providing the right solutions to clients in a consistent fashion.
What Lawyers Professional Liability Insurance Is
Attorneys professional liability insurance, also called E&O insurance, protects attorneys, law firms, paralegals, and anyone providing legal advice and services from claims of work errors or negligence. Professional liability insurance covers defense costs and settlement payouts, up to the policy limits, for claims that your work didn’t meet professional standards.
Common areas where lawyers professional liability insurance may see claims include:
- Conflicts of interest: A divorce attorney plays softball with his client’s ex-spouse and is accused of not working for his client’s best interest.
- Business transactions and securities: A mergers and acquisitions attorney is accused of breaching his fiduciary duty because an error in protecting intellectual property during the merger resulted in unapproved liquidation of assets.
- Commercial real estate: A real estate investment attorney answers questions to a nonclient at the closing of escrow get construed as advice with the attorney liable for statements.
- Trusts and estate planning: Family law attorneys work with highly sensitive family matters and often siblings or heirs who are dissatisfied with what the trust owner decided to do and blame the attorney.
- Privacy violation claims: All attorneys have sensitive, private, and personal information on their clients that must be protected. If a law clerk doesn’t lock files or a company practice makes the data susceptible to breach, the attorney is responsible.
Attorneys know better than anyone that someone can file a claim that has no merit or may even be considered frivolous, just because they are upset with a result. While everyone should want to have protection to cover honest errors, having a professional liability policy to fight the legal defense against frivolous claims helps preserve an attorney’s reputation.
Lawyers Professional Liability Insurance Claims-made Policies
Because the ramifications of legal work may not be realized until months, if not years, after the work was done, lawyers professional liability insurance is written as claims-made policies. Claims-made legal malpractice insurance policies have an effective date that the policy starts on but covers potential claims made prior to the policy being put in force.
This coverage is achieved with a retroactive date stated when the policy application is approved. It is also known as “prior acts coverage” in some policies. As long as the policy is in force when the claim is made, and the prior act happened within defined claims periods, it will be covered.
Let’s say, an attorney obtains insurance on January 1, 2019, for his family law practice with a retroactive date of January 1, 2017. A client passes away on January 5, 2019, and, when the heirs learn the attorney helped change the trust on July 15, 2017, they file a lawsuit against the attorney, claiming he changed things when their father was not of sound mind. This is a covered lawsuit under the new attorney professional liability insurance policy.
What Lawyers Professional Liability Insurance Covers
Attorney professional liability insurance is a policy that covers claims for honest mistakes and negligence. Lawyers are detail-oriented individuals, trained and licensed to understand the law and contracts but are not immune to missing a deadline, overlooking a contract phrase, or having clients unhappy with the results.
The unintentional acts covered by professional liability insurance include misrepresentation, giving incorrect advice, and violations in good faith. A lawyers professional liability policy allows attorneys to conduct business without worrying about occasional unintentional human errors leading to considerable financial exposure to the business.
Attorney professional liability insurance covers unintentional negligent acts, including:
- Misrepresentation: Failure to explain attorney-client relationship or otherwise misrepresenting the details of any legal situation. This would include telling a client there is “no way he can lose,” but he ends up going to prison anyway.
- Giving incorrect advice: Improper information is given to the client resulting in financial or other harm such as telling a mother it is OK not to do a custody exchange with her child to her ex-spouse because he didn’t pay child support leading to court sanction against his client.
- Violation of good faith: Acts of noncooperation with a client, such as withholding information, or failure to communicate, such as not informing a client of an order to show cause that requires his input to respond.
While it is important to always strive for the highest professional standards, mistakes do happen. E&O insurance policies for lawyers serve as your legal protection against oversights and mistakes.
What Lawyers Professional Liability Insurance Does Not Cover
Lawyers professional liability insurance does not cover egregious or intentional acts of omission, negligence, or fraud. If someone is convicted of criminal activity, the legal defense is not covered by E&O insurance.
Attorneys professional liability insurance typically does not cover the following situations:
- Egregious illegal, dishonest, or malicious acts: Intentional acts of negligence or fraud are always excluded from coverage.
- Bodily harm or damaged property: Third-party slip-and-fall or other incidental accidents are covered by general liability insurance instead.
- Internal litigation: Lawsuit from another insured person on your policy; for example, if another member of your business sues you, this would be covered by directors and officers (D&O) insurance instead.
- Previously claimed wrongful acts: Claims reported under a previous policy that were denied.
Why Attorneys Need Legal Insurance Protection
Having insurance that covers the legal costs of representation may seem moot for attorneys who can defend themselves. However, attorney professional liability insurance covers the potential claims and the legal defense necessary. Additionally, even if an attorney could represent himself or herself, it isn’t always in his or her best interest to do so.
Having a legal team dedicated to defending against claims frees up emotional energy and time for the attorney to continue to run their law practice and serve other clients. An analogy would be a home builder needing structure insurance. While the builder is capable of rebuilding a structure after a loss, it takes time and materials to do so. Doing it themselves takes time and energy away from running his business and serving other paying clients.
Lawyers Professional Liability Insurance Costs
Lawyers professional liability insurance costs average around $2,000 annually but vary based on the size of your law practice and the specific industry you serve. A law office working on multimillion-dollar mergers and acquisitions contracts will pay more than a sole practitioner who helps families with probate settlements.
Typical Lawyers Insurance Cost Examples
|Lawyer Insurance Policy Type||Annual Cost||Deductible||Coverage|
|General Liability Insurance||$600||$0||$1 million|
|Business Property Insurance||$500||$500||$25,000|
|Professional Liability Insurance||$2,000||$0||$1 million|
|Workers’ Compensation||$1,200||$0||$1 million|
Lawyer professional liability costs will vary based on several factors that are not limited to location, the type of law, and the size of the law practice. Insurance carriers will also want to know not just a claims history of the law firm, but the number of lawsuits filed against the attorney or anyone in the firm.
The primary factors affecting the cost of attorney professional liability insurance include:
- Type of law: Attorneys serving high-profile companies or public figures often have higher exposure to complex deals and potential errors resulting in claims or lawsuits against them.
- Size of business: Revenues and the number of employees increase the potential risk to a law firm.
- Location of law practice: Some cities and states have higher insurance costs often because they are considered “highly litigious locations.”
- Claims and lawsuit history: Previous claims or lawsuits not covered by other policies are indicative of future claim reporting and increase premium costs.
- Procedures and contractual agreement: Using clear-cut contracts and having protocols in place to ensure all members of the office follow security and privacy procedures helps reduce attorney errors and omissions policy premiums.
Lawyers Professional Liability Insurance and Other Business Insurance
Attorneys need more than just lawyers professional liability insurance to properly cover their law firm. Every attorney should establish a comprehensive risk mitigation plan that includes insurance policies, such as general liability, business property, workers’ compensation, and commercial umbrella policies.
Commercial General Liability Insurance
Many attorneys make a living representing clients in slip-and-fall injury cases and understand the need for commercial general liability insurance, which covers third-party liability claims for bodily injury, property damage, and related medical bills or legal costs.
Third-party injury and property damage claims are among the most common and expensive claims that a business can face. General liability covers the costs of settlement and legal defense, if necessary.
Commercial Business Property Insurance
Everything in the law office, including furniture, storage files, computers, and office supplies are considered business property. Commercial property insurance pays to replace or repair property damaged or destroyed due to fire, theft, vandalism, or natural disaster. In most cases, insurance companies don’t need an itemized list, but attorneys should create one to get an accurate value of business contents.
Workers’ Compensation Insurance
Every state except Texas requires workers’ compensation insurance for any part-time or full-time employees. Workers’ compensation insurance covers employees injured while on the job and includes chronic office injuries such as carpal tunnel syndrome or lower back issues. Workers’ comp pays medical bills, wages from lost work time, and rehabilitation services for injured employees to help them get back to the job.
Commercial Umbrella Policy
A commercial umbrella policy increases the liability coverage of other underlying liability policies that a lawyer has including general liability and workers’ compensation. It should be noted that commercial liability policies don’t add extended coverage to lawyers professional liability policies.
Business Owner’s Policy
A BOP combines general liability, business property, and business interruption coverage into one comprehensive business policy. A BOP is often less expensive compared to buying each policy type individually because the risk is underwritten as a whole, and there are fewer administrative costs. BOPs don’t cover commercial auto or workers’ comp liabilities or losses.
Tips on Getting Lawyers Professional Liability Insurance
The application process for all insurance policies starts with an application that is reviewed by underwriting. When purchasing lawyer professional liability insurance, follow the following tips to expedite the process and keep rates as low as possible.
Three key tips to keep in mind when applying for lawyers professional liability insurance include gathering the right information, determining the retroactive dates of the claims, and having a written contract of services in place.
1. Gather the Right Information
Save time in the application and underwriting process by having the required information available when getting the initial quote. Providing correct revenue information, law firm size, and typical client profile helps get the right quote that doesn’t get changed later when information gaps are filled in.
2. Determine Claims Retroactive Dates
If given the option for retroactive date period, determine how long you want to extend your coverage to prior acts. In many cases, you will have the option of one, two, or three years prior to the inception date of the policy. Consider previous insurance policies’ coverage and whether there is any tail coverage to the policy after it was canceled.
3. Always Have a Written Contract of Services
Insurance companies will ask about your contract process and whether or not you use standard contracts all the time ― or how often you do use them if not 100% of the time. As an attorney, you know the better your contracts are, the less likely there is an error or omission. It also sets expectations for clients in writing, reducing potential claims.
Lawyers Professional Liability Insurance Frequently Asked Questions (FAQs)
Every lawyer should have attorney professional liability insurance to protect against accidental professional mistakes. If after reading this article, you still have questions about your professional liability insurance needs, please visit our forum or drop us a comment below. Our mission is to give the best answers to your questions.
Is lawyers professional liability insurance combined with general liability?
Lawyers professional liability insurance is independent of general liability policies. Professional liability insurance covers professional actions like negligence or misrepresentation while general liability insurance covers incidental accidents leading to injury or property damage. The risks are underwritten differently and require separate policies.
What is the retroactive date on a claims-made policy?
All lawyer professional liability policies are written as claims-made policies, meaning they cover acts that happen before the policy was started. The retroactive date is the date prior to the policy inception date designated as when actions are covered as long as claims are made during the policy-in-force period.
Should attorneys in large firms have their own professional liability insurance?
Law firms often have a master policy that covers all actions of partners, junior attorneys, and support staff. However, every attorney should maintain their own professional liability insurance to protect their license to practice law. There may be instances where a lawsuit names the attorney directly, and the master policy does not cover the claim.
Lawyers professional liability insurance gives attorneys a defense against negligent actions and fraudulent claims that they didn’t do their job correctly. Buy the right coverage so you can get back to work and represent your clients rather than defend your reputation.
Getting a professional liability policy that fits the needs of your law practice is easy with AP Intego. Their representatives are trained to understand the unique risks different types of law practices have. Get a no-obligation quote quickly with AP Intego today.