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Home > Blog > Attorney Malpractice—Mandatory Attorney Malpractice Insurance?
TUESDAY, NOVEMBER 7, 2017

Attorney Malpractice—Mandatory Attorney Malpractice Insurance?

According the Illinois ARDC in 2016 of the 13,500 solo attorneys practicing law 41% of them did not carry attorney malpractice Insurance.  Except for a handful of states attorney malpractice insurance is not required.   So as shocking as the ARDC Illinois number is to the general public, this is not a surprising number.  It is estimated that nationwide in states that do not require the attorneys to carry attorney malpractice insurance over 1/3 of those law firms go bare.

So if you happen have engaged an uninsured attorney that commits malpractice you may have little chance in obtaining indemnification for the mistakes your attorney committed and the damages suffered.   There can be many reasons that an attorney not carrying attorney malpractice insurance.  Some attorneys cite the cost of coverage.  Many attorneys though feel they are ‘suit proof’.  In essence the law firm entity has made sure that if there is a claim made against the firm, there are no assets to pay the claim.  If there are no assets to pay the claim, very difficult to get another attorney to pursue getting ‘blood out of a turnip’.

Just by obtaining attorney malpractice insurance a law firm is required to go through an application process that asks a how the firm practices law, the controls the firm has in place to prevent an error from occurring, and what previous claims and bar complaints that attorneys that the firm have had.   If the law firm’s attorneys have had previous claims and bar complaints the attorney malpractice underwriter will want to know the steps taken by the firm to prevent these issues from arising in the future.  Law firms without malpractice insurance coverage have not gone through this minimal vetting process. 

While Illinois is not requiring attorneys to carry attorney malpractice insurance coverage, they are taking a carrot and stick approach through the change in Rule 756(e).   Starting in 2018 for those attorneys that do not choose to carrier attorney malpractice insurance, Illinois is initiating Proactive Based Regulation (PMBR).  Attorneys not carrying malpractice insurance will be required to take a 4 hour PMBR self-assessment course every two years.   

Time will tell if this increases the percentage of attorneys carrying attorney malpractice insurance in Illinois and whether other states choose to adopt a similar requirement.

Posted 5:14 PM

Tags: legal malpractice, attorney malpractice insurance, lawyers professional liability insurance, ethics
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