Legal Malpractice Insurance - Your Safety Net in the Legal World
Working in the legal department is quickly becoming one of the most dangerous white collar occupations.
In a law firm of 20 or so members, it is not unusual to find at least one member of the group receiving malpractice suits at least annually. To avoid the hundreds of hours and exorbitant fees that come with law suits is legal malpractice insurance.
Key characters
The legal malpractice insurance is the basic defense in the legal industry. Most law firms are insured, but it is equally important for individual lawyers such as you to be aware of the details of the insurance, especially if you are heading your firm.
The main characters in these types of insurance are the lawyer or insured, the broker who manages the transaction between insured and the insurance company, and the insurance company. When choosing plan, there are several things to consider.
Don’t fear costs
First, the cost of the insurance is of secondary nature. As anyone in the legal profession knows, the court room and all the stages leading to the court, is harrowing and very costly. In some cases, even the claimant suffers at the end of trial – from paying his own lawyer fees for everything from consultation, pre-trial, trial, and post-trial costs.
Even worse is for the law firm, who loses the most valuable resources for a lawyer – time. Up to 200 hours of time is consumed in malpractice defense for a small to medium sized firm, each hour of which is billable. With good insurance, you have your costs covered.
Check the insurance coverage
The actual legal malpractice insurance coverage must also be checked. The best are those which are not self-exhausting. In some insurance types, the limit on claims available is determined by the premiums invested in the insurance. Thus, when the trial happens to take a slower pace than expected before being resolved, not only is the law firm’s reputation is tarnished, but the actual insurance claims is reduced.
When to use it?
Aside from actual practice, some other actions that require good insurance knowledge is when a lawyer intends to practice alone and leave a firm, or when a new law firm is created or dissolved. Whatever type of practice and group you belong to, the insurance is key.
Reputation
In reality, law firms regularly encounter law suits for malpractice. While in most instances a firm is able to solve these, the truth remains that public impact is of utmost importance in the legal profession.
Without the benefit of legal malpractice insurance, you encounter more than cost, but a negligent image towards present and future clients.
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