Newly admitted attorneys have numerous considerations as they get started with their careers. When attorneys enter legal practice, one of the first they should do is obtain professional liability insurance. Newly admitted attorneys can benefit from understanding the importance of legal malpractice insurance.
What Is Legal Malpractice Insurance?
An attorney may face a legal malpractice claim when they commit a negligent act or omission that harms a client in some way, such as missing filing deadlines or making obvious errors in trial strategy. The client can pursue a legal malpractice claim to recover compensation for the harm they experienced due to an attorney’s negligent handling of their case.
Attorneys can protect themselves from financial liability for malpractice by purchasing a legal malpractice insurance policy. Legal malpractice insurance can pay for an attorney’s legal costs to defend against a malpractice claim and for any settlement or judgment that the attorney becomes liable for.
Why Newly Admitted Attorneys Should Consider Coverage Early
Newly admitted attorneys should strongly consider obtaining legal malpractice insurance coverage since they face a higher risk of committing errors in practice due to their inexperience. New attorneys may not have older, more experienced lawyers to consult if they work in small or solo law practices. Furthermore, purchasing legal malpractice insurance coverage can help a newly admitted attorney build credibility and trust with prospective clients, as coverage can show clients that an attorney will take financial responsibility for any losses caused by their errors.
Additionally, new attorneys who go to work for law firms may experience gaps in coverage due to the delay in the firm adding them to its insurance policy. This makes it critical for an attorney to obtain personal coverage in advance.
Types of Policies and Key Features to Look For
Legal malpractice insurance policies come in two types: claims-made and occurrence. A claims-made policy covers any malpractice claim submitted to the insurer during the policy period. In contrast, an occurrence policy covers malpractice claims when the act of malpractice occurred during the policy period. As a result, most legal malpractice policies take the form of a claims-made policy, since it can take months or years for clients to recognize they may have a malpractice claim against an attorney and to bring their claim against the attorney.
When purchasing a malpractice policy, attorneys should review the policy’s coverage limits and deductibles. An attorney should ensure that a policy will cover the types of malpractice claims they may face in practice and has a coverage limit high enough to pay a likely judgment or settlement in a malpractice case. Attorneys can also manage premiums by selecting a deductible or self-insurance limit, which represents the money that an attorney will pay towards a settlement or judgment before the insurance policy kicks in. Attorneys should also consider their need for tail coverage, which can protect them if they change firms or leave active law practice.
Cost Considerations and How to Get Covered
The cost of a legal malpractice insurance policy will depend on various factors, such as the lawyer’s practice area, the geographic area where they practice, and their firm’s size. Newly admitted attorneys may have higher premiums due to their higher risk of malpractice. However, the fact that freshly admitted attorneys may not handle higher-value cases can help temper the cost of insurance premiums. Attorneys may have insurance coverage through their law firm, or they may purchase coverage directly from an insurance carrier or mutual company.
Contact WILMIC Today
Even newly admitted attorneys can benefit from purchasing legal malpractice insurance. Contact WILMIC today for an initial consultation with our staff to learn more about the importance of having legal malpractice insurance when joining or starting a practice.