While no law firm wants to face a legal malpractice claim, malpractice insurance is necessary to protect yourself from existential liability.
Factors That Affect Your Malpractice Insurance Premium
How much you could expect to pay for this important coverage depends on many factors, including the following.
Likelihood of Complex or Risky Cases
Firms that often handle risky or complicated cases have a higher chance of being involved in legal disputes that could lead to a malpractice claim. For instance, personal injury cases (particularly medical malpractice cases) can lead to malpractice claims if clients don’t receive the compensation they expected, causing them to blame their legal team. Similarly, firms that handle securities law cases may face a malpractice claim if their clients face penalties from regulators or law enforcement agencies, as their clients may argue their legal team didn’t do enough to protect them. Because these firms operate in inherently riskier practice areas, insurers frequently charge higher premiums.
Complex Regulatory Frameworks
Law firms that operate in industries with extensive regulatory frameworks (securities law, for example) have a higher risk of facing a malpractice claim because failing to comply with these regulations can have catastrophic consequences. A seemingly simple legal mistake could have massive financial ramifications for these firms’ clients, leading clients to file a malpractice claim. This increased risk of a malpractice claim often results in higher insurance premiums.
Potential for Large Settlements Against Clients
Finally, firms with clients who face the risk of substantial damages claims have a higher chance of facing a malpractice claim, leading to higher insurance premiums. For example, corporate clients forced to pay large damages amounts may blame their legal team and file a malpractice claim. This increased risk for firms often directly corresponds with higher malpractice insurance premiums.
Trust WILMIC To Provide the Malpractice Protection You Need
WILMIC has provided affordable, reliable legal malpractice insurance to Wisconsin lawyers since 1986. Call us today or reach out online to learn more about our coverage options.