MONDAY, MAY 9, 2016
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 a lawyers liability 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.
The cost of lawyers liability insurance varies widely. Even with having a “clean” record no two attorneys are going to pay the same for their coverage. Even though the firm is insured as an entity, the cost generally is on a per-attorney basis. The key factors affecting cost are the following:
- claims history
- areas of practice
- number of years maintaining claims-made coverage
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 are 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 can start for as little as $300 to $500 for an attorney without coverage in low risk areas of practice but expect premiums to rise over the first 5 to 7 years. The average costs for most attorneys for a fully rated policy should be $1,200 to $2,500 per year assuming minimal limits. Attorneys that practice in the higher risk areas can expect to pay around $3,000 to $10,000 per year. All of this can also vary 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 lawyers, Malpractice Insurance is Sleep Insurance.
Call us to get a lawyers malpractice insurance quote at 866.940.1101.
Contact Me Today
Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080
Daniel Pocchiari said...
The third paragraph above referenced the following: "assuming minimal limits". What would be the range of such minimal limits?
THURSDAY, JANUARY 25 2018 12:32 PM
Lee E Norcross said...
Generally 100,000 per claim/300,000 in the aggregate are minimal limits.
THURSDAY, JANUARY 25 2018 3:13 PM
Mike Hanley said...
If you had the minimal limits and a client walked through your door with a 25 Million dollar Estate that he wanted a complicated Will drawn up for ( Read " Likely to be contested") how difficult would it be to increase your coverage limits?
THURSDAY, SEPTEMBER 17 2020 5:45 PM
Justin Norcross said...
Mike, if you are looking to increase the limits up to $25,000,000 it will likely require multiple layers from different insurance carriers to get up to that limit. For instance, the highest limit for many carriers is $1,000,000 or $2,000,000 for a solo attorney. So you would have to get that underlying limit and start building on top of that. The next carrier may be willing to match the underlying limit, so assuming you have a $2,000,000 limit they would put up another $2,000,000 limit. That puts you at $4,000,000. The next carrier after that might be willing to do a $4,000,000 limit on top of that, so you would be at $8,000,000. Many carriers are not going to be wiling to put that much exposure down for one insured so you would get a lot of markets involved and each one is going to want a minimum of $5000- $10,000, depending on how much limit they are putting in. So while a $25,000,000 limit may be possible we usually find that it is not economically feasible.
That being said, if you have a $25,000,000 estate you are working on, you may be comfortable with a $1,000,000 or $2,000,000 limit for your legal malpractice insurance since a $25,000,000 error may be tough to perceive happening.
THURSDAY, SEPTEMBER 17 2020 6:26 PM
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