Lawyers that choose to go without malpractice insurance believe that because they work for a small firm and maintain close relationships with their regular clients, that they are immune to claims. Other attorneys believe that the chances of them facing a claim aren’t great enough for them to purchase an Attorney Malpractice insurance policy. The flaw in this logic is that small firm lawyers are just as likely to have a malpractice claim as some of their more high profile peers. Many small firm lawyers believe that they will have to pay just as much as their large firm peers.
Attorney malpractice insurance costs vary widely. No two attorneys are going to pay the same for their coverage. Law firm attorney malpractice insurance is written for the entity. The cost is on a per attorney basis. The key rate factors are:
1. Number of Attorneys and how long they have been with the firm
2. Claims History
3. Disciplinary History
4. Areas of practice
5. Number of years with continuous claims made coverage
6. Liability Limits
7. Deductible options
The costs for different areas of practice can be 5 to 10 times from one area for practice to another. Criminal Law and insurance defense generally on the lowest end of the spectrum; with Securities Placement, Class Action Work and Intellectual Property being on the high end of costs paid.
Premiums for an attorney without insurance coverage can start out for as little as $300 to $500 for the 1st year of coverage. Expect premiums to rise over the 1st 5 to 7 years until the attorney is fully rated. The average costs for most fully rated attorneys should be $1200 to $2500 per year depending upon limits per attorney. Attorneys that practice in the higher risk areas can expect to pay around $3000 to $10,000 per year per attorney. This varies widely by state and location in the state based on the carriers past claims experience in that state.
For most attorneys this cost is small versus the risk to one’s assets. For Attorney Malpractice Insurance is Sleep Insurance.