Businesses often require the services of lawyers to handle legal situations that arise in the workplace. They’re not the only ones who need representation. Recent research conducted with attorneys in the United States showed that approximately 6 percent of lawyers face some sort of professional liability allegation in any given year. In fact, claims against attorneys have been increasing at a steady rate in the past two decades, and the study shows that this trend is only set to grow in the near future.
What Is Liability Insurance?
Let’s be honest – dealing with a claim against professional liability can be both time-consuming and expensive. One way to cover yourself and deal with such claims professionally is to opt for liability insurance. Liability insurance helps to share the monetary risk arising from such claims by timely defending and responding to all of the claims made.
Professional liability insurance can also protect lawyers against significant losses – not just monetarily but also regarding their reputation in the market and their future client base. It also helps lawyers in professionally meeting their obligations and in protecting the interests of their clients as well. For more details, you can check errors and omissions (E&O) insurance options for attorneys.
What Does Liability Insurance Cover?
Any typical liability insurance is generally designed to cover for claims that may arise from any unintended wrongful doing that may occur from rendering legal services as a lawyer. Liability insurance covers acts such as services provided as a notary public, as a title agency or agent, as a trustee, executor or a representation of a client or as an officer of a legal institution. It provides ample coverage for claims expense and indemnification, of course, subject to any particular endorsements and deductibles.
What Are the Exclusions Under Liability Insurance?
For things that may not be necessarily covered by professional liability insurance, there can be some omissions and errors that are either not covered legally or are beyond an insurer’s interest. All of these items will be termed as exclusions in the liability insurance policy and can include any criminal, fraudulent, malicious or dishonest act.
When the need arises, it is not just a lawyer that needs protection against such claims but also all employees of a law firm in question. While in some disputes, an individual lawyer becomes sued, in others a full law firm becomes sued, and all the employees of that law firm need liability insurance to protect themselves. So, a professional liability insurance policy is often designed to cover lawyers, all employees of a law firm, its heirs, administrators, executors and anybody who interferes in the legal matters of the clients on behalf of the law firm.
Final Words
One of the other important questions you’d like to ask at the end is whether such liability insurance is expensive or not. The pricing for such insurance along with its premium and the policy term depends on some factors, just like the case is in any other type of insurance.
Generally, there is a base rate that can change based on the state in which one practices and the number of years one has been practicing. To top it up, other factors such as any past claims, infrastructure factors, risk management, etc. come into play as well to determine the final pricing for liability insurance. So do your research and understand what it is along with all its logistics before signing up for one.
