All insurance carriers look at 2 things regardless of line of business when setting rates; frequency & severity. Lawyers Professional Liability Insurance carriers do not have the law of large numbers always in their favor when setting rates. An auto insurance carrier potentially has millions of risks to evaluate the different costs of coverage and the causes of loss. With claims made coverage attorney malpractice policy, individual carriers may not have enough risks to precisely derive which practice areas are better than others to the same degree of accuracy of an auto insurance carrier.
There is some caution with producing a list, as given different time periods and different locales lawyer practice areas riskiness changes and you would get dramatically different answers. For example, up until around 2009, residential real estate and title agency coverage was considered a preferred area of practice. Although not as restrictive as a couple of years ago, real estate is now considered a much riskier area of practice.
And different attorney malpractice insurance carriers consider different areas of practice riskier than others. This has to do with the individual insurance carrier’s results and the results of their reinsurance carriers. With all that said, here is a list of some of the riskier practice areas for lawyers.
Riskier Areas of Practice:
· Anti-Trust/trade Regulation
· Banking/financial Institutions
· Mergers & Acquisitions
· Entertainment/Sports especially with money management
· Environmental Law
· Intellectual Property
· International Law
· Class Action/Mass Tort
· Medical Malpractice
· Real Estate
· Tax Opinions
· Large Estate & Trust work
Some of the above areas are only written by a few carriers or in surplus lines depending on answers to other underwriting questions. But having a concentration of any of the above practice areas will likely be a referral to the home office for pricing and law firms that do the above types of work will likely be paying more than your average firm.