Legal malpractice insurance may be one of the most confusing aspects of practicing law. It’s important to have sufficient coverage with a premium and deductible you can afford. So, how do you determine which provider and policy is best for you?
Premiums and Deductibles
Determine how much you can afford to pay for both premiums and deductibles. You may choose a higher deductible for lower up-front costs, but be sure you are able to pay the deductible in the event of a claim.
You may be able to choose a plan that applies your deductible only to indemnity payments and is not invoked to cover defense costs. Some insurers also may offer a zero-deductible option.
Most legal malpractice insurance policies have per-claim deductibles, but some insurers offer annual aggregate deductibles, which place a cap on the total amount of deductible paid in a year, regardless of the number of claims filed.
Extent of Coverage
It’s important to understand what a policy would cover and what it would not. Do you handle side jobs or pro bono work? It’s important that you discuss all of your work and areas of practice with potential insurers to make sure you have comprehensive coverage.
What other coverage limits are involved? Be sure you understand any per-claim and aggregate payout limits and what costs are included in (and excluded from) these limits. Will you be reimbursed for lost earnings? Are you covered for professional complaints and subpoena expenses?
Do you have gaps in your coverage? Ideally, you’ve been covered since you began practicing law, and your policy will provide prior acts coverage. Double check your dates to ensure an accurate retroactive date appears on your policy, especially when you renew.
You may want to take a hard look at how easy a provider is to work with. Did you get through to somebody on your first contact? Does the representative seem knowledgeable and eager to work with you? Consider the professionalism of the insurer’s representatives and read reviews to see what your colleagues have to say.
Customer service can mean a lot when you’re dealing with the stress of a claim. Ask how claims would be handled and what will be expected of you during the process.
To protect your legal practice, your reputation, and your assets, you need legal malpractice insurance. Don’t be surprised by additional expenses! Ask these key questions before you purchase so you can be confident that your coverage is both complete and affordable.