As an attorney, you know first-hand that even meticulous and well-intentioned professionals can be sued by dissatisfied clients. Regardless of whether you work with a large firm or a small practice, it’s essential to maintain lawyer professional liability insurance throughout your career (and potentially extended coverage to protect you after you retire).
Professional liability insurance (aka errors & omissions insurance) is a special type of coverage for those who work in the professional services industries, such as accountants, insurance brokers, marketing consultants, doctors, therapists, and attorneys. It protects against accusations of omissions, negligence, misrepresentation, violations of good faith and fair dealings, and/or inaccurate advice.
Why Do I Need Lawyer Professional Liability Insurance?
Providing legal guidance comes with inherent risks. There are simply no guarantees that a case will unfold exactly as you and your clients would like, and mistakes can happen despite safeguards and risk management policies.
If a client or former client sues you, defense costs (regardless of how frivolous the claim may be) can be devastating to you and your firm – even before settlements or damages are considered. Lawyer professional liability (LPL) insurance provides the resources and financial support you need to defend against and recover from a lawsuit.
Additionally, many potential clients require you to carry LPL insurance – which means that you risk losing a potential new engagement if you aren’t properly prepared ahead of time.
What Happens If I Move Firms?
Most law firms provide lawyer professional liability insurance coverage (although you may pay part of the premium), which means the policy often doesn’t travel with you, the individual attorney, as you move from one firm to another.
When starting with a new firm, it’s important to consider whether you have LPL coverage if you were to get sued for work you conducted at your old firm – since there can be a delay between when the services were rendered and the filing of a lawsuit. Your new firm will probably not cover “prior acts,” but you may be covered under the “former attorney” clause of your old firm’s policy. However, if your old firm goes out of business or lets their policy lapse, you could be left without coverage.
As you make the decision to move firms, you should consider Extended Reporting Period Coverage (aka Tail Coverage) – which extends the period of time in which someone can make a claim against you, so long as the act in question occurred during the policy period.
Get Expert Advice on Your Specific Professional Liability Insurance Needs
At Swarts, Manning & Associates, we provide a unique perspective on all of your commercial coverage options, and we help to determine which carrier best fits your business needs. We strive to find you the broadest coverage at the best available rate. Give us a call to get started: (833) 878-2820.
Each week, Swarts, Manning & Associates covers relevant topics for your business. Stay tuned to hear more discussions about managing your insurance and industry-specific tips.
