When making decisions about Lawyer Liability insurance and what constitutes having adequate coverage, attorneys must factor in the potential for facing a costly and time-consuming lawsuit. When deciding upon the amount of coverage that you should purchase, take into consideration any known risks and exposures, including your current financial solvency, and the types of clients you regularly take on in your line of practice.
Some attorneys are more likely to face issues of malpractice, or breach of fiduciary duties, than others may normally face. To answer the question as to how much coverage is actually needed, this is best determined through consultation with an experienced lawyers’ professional liability broker that is trained to help analyze the types of concerns facing individual lawyers and their firms. By knowing your particular situation, only then can one suggest the appropriate limits and deductibles.
Factors to consider when choosing coverage
There are certain factors to consider when choosing which type of coverage to purchase. You’ll need to include any potential defense costs, indemnity for liability and factor in any billable time lost due to depositions, trial or other claims proceedings. You’ll also want to factor in the possible severity of these types of claims and the effect they may have on your firm.
The likelihood of facing a claim is much higher in some areas of practice, for example, residential real estate or collections practice, than in other areas of practice, but the average amount of any one claim may also be much lower. Those who work in patent law, securities work or entertainment law, where claims are often less frequent, must still consider the fact that there is the potential for significantly higher losses.
Situations that may dictate your coverage decisions
Another area of concern for many attorneys is a gap in coverage, or a lapse altogether. Gaps in coverage can arise when moving from firm to firm or when ceasing to engage in practice, even for a short while. One way to avoid a gap in coverage is by maintaining coverage with at least one insurer. Maintaining continuous coverage is extremely important because only an in-force policy can provide coverage when a claim arises. These are just a few things to consider when making choices for Lawyer Liability insurance coverage.