For attorneys, having the right malpractice insurance is essential to protecting yourself and your business from the risks associated with legal malpractice claims. But how much can a legal malpractice claim cost you if you don’t have professional liability insurance? This post will take an in-depth look at the costs of such a claim and what you should do if you face one without insurance.
The Out-of-Pocket Cost of a Malpractice Claim
The average claim cost is $160,000, but the median price is much higher at $237,500.
How Are Claims Costs Calculated?
There are a few different ways to calculate the cost of a legal malpractice claim. The first way is to look at the total amount of damages awarded in the case, including economic and non-economic damages. Economic (monetary) damages are things like lost wages or medical bills. Non-economic damages are things like pain and suffering or emotional distress.
The second way to calculate the cost of a legal malpractice claim is to look at the attorney’s fees incurred in defending against the claim, including the fees charged by the attorney and any expert witnesses used.
The third way to calculate the cost of a legal malpractice claim is to consider how much it costs to settle the claim out of court, including the attorney’s fees and any other incurred settlement costs like a mediator or court costs.
The fourth way to calculate the cost of a legal malpractice claim is to look at how much it would have cost to defend against the claim if it had gone to trial, including both attorneys’ fees.
The Bottom Line
In conclusion, the costs of a legal malpractice claim without insurance can vary greatly depending on the complexity and severity of the case. Therefore, it is beneficial for attorneys to consider investing in malpractice insurance to avoid costly financial losses due to potential claims from clients or third parties.