Malpractice Insurance: Are Lawyers Required To Have It?

While most states in the US do not require attorneys to carry malpractice insurance, it is highly recommended that they do so. Malpractice insurance provides valuable protection for attorneys and their firms in the event of claims of malpractice or negligence, which most lawyers will face at some point in their careers. Although it can be seen as an unnecessary cost, malpractice insurance can protect the financial future of a law firm in the event of a claim.

Malpractice insurance requirements vary from state to state in the US

Legal malpractice insurance is one of the most important types of liability coverage for law firms and practicing attorneys. It provides insurance coverage to an attorney in the event of claims of malpractice or negligence. However, most states in the US do not require attorneys or law firms to have legal malpractice insurance (LPL).

While LPL is not mandatory in most states, there are specific requirements and exemptions that vary from state to state. Here are some examples of how LPL requirements differ across states:

Alabama

Attorneys in Alabama are not required to have legal liability insurance. However, to practice law in the state, attorneys must obtain a license, adhere to the state's professional responsibility code, and ensure their law firm has its status on file with the Bar Association.

Alaska

Alaska does not mandate attorneys to carry malpractice insurance. However, they must notify clients in writing if they have no malpractice insurance or if their coverage is below $100,000 per claim and $300,000 aggregate. Alaska attorneys must also be members of the Alaska Bar Association, pay annual registration fees, demonstrate good moral character, and follow the Bar's rules.

Arizona

Arizona does not require attorneys to have malpractice insurance. Arizona attorneys must be members of the State Bar Association, pay annual registration fees, and maintain good standing with the Bar. Law firms also need to have their status on file with the Bar.

Arkansas

Arkansas attorneys are not mandated to carry malpractice insurance. They must be members in good standing of the State Bar Association, submit annual registration fees, and maintain good standing. Law firms must also have their status on file with the Bar.

California

California does not have mandatory liability insurance requirements for attorneys. The Rules of Professional Conduct in California only require lawyers who do not have insurance to disclose this fact to their clients.

Colorado

Colorado lawyers in private practice are not required to carry malpractice insurance. However, they must report their coverage status to the Colorado Supreme Court Attorney Registration Office annually. They also need to be members of the Colorado Bar Association, pay registration fees, and demonstrate good moral character.

Ohio

In Ohio, attorneys must have malpractice insurance or inform their clients if they do not at the time of engagement. The insurance must cover at least $100,000 per occurrence and $300,000 in aggregate. Attorneys must also disclose if their insurance is terminated. Other requirements include membership in the Ohio State Bar Association, payment of annual registration fees, and demonstration of good moral character.

Texas

Texas mandates attorneys to carry malpractice insurance unless they are appointed by the Federal Government or practice federal law. Limited Liability Partnerships (LLPs) must have $100,000 if they do not set aside this amount to satisfy judgments. Attorneys must demonstrate good moral character, be members of the State Bar Association, pay registration fees, and have their status on file.

These examples demonstrate the variation in LPL requirements across different states in the US. It is important to note that even in states where LPL is not mandatory, it is still strongly recommended to protect against potential lawsuits and provide peace of mind.

Some states require attorneys to disclose their malpractice insurance status to clients

While most states don't require attorneys to have legal malpractice insurance, some states do mandate that attorneys disclose their malpractice insurance status to clients. This is the case in California, where lawyers without insurance must disclose this fact to their clients. Similarly, in Alaska, attorneys must notify clients in writing if they don't have malpractice insurance or if their coverage is below $100,000 per claim and $300,000 in aggregate. Alaska lawyers must also inform clients if their insurance coverage is terminated or reduced.

In Ohio, lawyers must inform clients if they don't have malpractice insurance or if their insurance is terminated. This insurance must cover at least $100,000 per occurrence and $300,000 in aggregate. New Hampshire, New Mexico, and Pennsylvania have similar requirements, with New Hampshire and New Mexico mandating disclosure if coverage is below $100,000 per claim and $300,000 in aggregate, and Pennsylvania requiring notification if coverage is less than $100/$300.

Some states require attorneys to report their malpractice insurance status to the state. For example, in Colorado, lawyers must report annually to the Colorado Supreme Court Attorney Registration Office whether they have malpractice insurance. Hawaii and Illinois also require lawyers to report their insurance status, with Illinois attorneys answering questions about their insurance every other year when renewing their authorisation to practise law.

Some states require attorneys to disclose their malpractice insurance status to the state

While most states don't require attorneys to carry legal malpractice insurance, some states mandate that attorneys disclose their malpractice insurance status to the state. This is done to protect clients, as most clients assume that attorneys have liability insurance.

Alaska, Ohio, and New Hampshire

Attorneys in these states must notify clients in writing if they have no malpractice insurance, or if their coverage is less than $100,000 per claim and $300,000 in aggregate. Clients must also be informed if the insurance coverage is terminated or if the coverage drops below the $100,000/$300,000 levels.

South Dakota

Attorneys in South Dakota must specify on their letterhead if they have no malpractice insurance or if their coverage is less than $100,000 per claim.

Delaware, Virginia, Nebraska, and North Carolina

These states require annual certification, either to the state's bar or the state supreme court, disclosing whether an attorney carries malpractice insurance. There are no minimum limits required.

Colorado

Colorado lawyers in private practice are not required to carry malpractice insurance, but they must report to the Colorado Supreme Court Attorney Registration Office whether they carry coverage on an annual basis.

Hawaii

While Hawaii does not require attorneys to carry malpractice insurance, they must disclose whether they have professional liability insurance on their annual Hawai'i State Bar Association attorney registration statement.

Idaho

Idaho requires attorneys to carry limits of $100,000 per occurrence and $300,000 as an annual aggregate.

Illinois

Illinois does not require attorneys to carry malpractice insurance, but they must answer questions about their professional liability insurance every other year when they renew their authorization to practice law.

Minnesota

Minnesota does not require attorneys to carry malpractice insurance, but they must disclose whether they carry professional liability insurance and the name of the provider.

New Jersey

Limited Liability firms in New Jersey must carry $100,000 in coverage, multiplied by the number of attorneys, and register the evidence of the coverage carried.

Oregon

All attorneys in private practice in Oregon must participate in a fund that covers $300,000 per claim and $300,000 in aggregate per year, including defense costs.

Texas

Texas requires attorneys to carry malpractice insurance unless they are appointed by the Federal Government or practice federal law. LLPs are required to have $100,000 if they do not set aside this amount to satisfy judgments.

Washington

Washington does not require attorneys to carry malpractice insurance, but they must report to the WSBA whether they carry coverage. Additionally, the Washington Supreme Court approved an amendment in 2021 that requires attorneys to disclose to clients if they do not meet minimum levels of malpractice insurance coverage.

Some states require attorneys to carry a certain amount of malpractice insurance

While there is no federal law requiring attorneys to carry malpractice insurance, some U.S. states have specific requirements for lawyers to carry a certain amount of malpractice insurance. These requirements vary across states, and it is important for attorneys to be aware of the regulations in their state.

In Idaho, lawyers are mandated to carry legal malpractice insurance with a minimum coverage of $100,000 per occurrence and $300,000 as an annual aggregate. This rule was implemented in 2018, making Idaho the second state after Oregon to mandate malpractice insurance for lawyers in private practice.

Oregon requires all attorneys in private practice to participate in a malpractice insurance regime, with coverage of $300,000 per claim and $300,000 aggregate per year, including defense costs. The fund is operated as a nonprofit corporation and covers about 6,600 attorneys.

Some states, like Ohio, mandate that attorneys either have malpractice insurance or inform their clients if they do not. In Ohio, the required insurance coverage is at least $100,000 per occurrence and $300,000 in the aggregate. Attorneys must also inform their clients if their malpractice insurance is terminated.

Other states, such as Alaska, do not require attorneys to carry malpractice insurance but mandate that they notify their clients in writing if they do not have insurance or if their coverage is below a certain limit, typically $100,000 per claim and $300,000 in aggregate.

Additionally, certain states like Texas require attorneys who are not appointed by the Federal Government or practising federal law to carry malpractice insurance. Texas also mandates that LLPs (Limited Liability Partnerships) have $100,000 in coverage if they do not set aside this amount to satisfy judgments.

While the majority of states do not mandate malpractice insurance for attorneys, it is important to note that the requirements may change over time, and attorneys should stay updated with their state's regulations.

Some states require attorneys to carry malpractice insurance if they are a certain type of firm

While most states don't require attorneys to carry malpractice insurance, some states do mandate it under certain conditions. These requirements vary across states and depend on the type of firm, business formation, and other factors. Here are some examples:

Ohio

In Ohio, attorneys must have legal malpractice insurance with a minimum coverage of $100,000 per occurrence and $300,000 in the aggregate. If they don't have this insurance, they are obligated to inform their clients at the time of engagement and any subsequent time that they don't maintain such coverage.

Texas

Texas mandates that attorneys carry malpractice insurance unless they are appointed by the Federal Government or practice federal law exclusively. Additionally, limited liability partnerships (LLPs) in Texas are required to have $100,000 in coverage or set aside this amount to satisfy judgments.

Oregon

Oregon attorneys are required to obtain malpractice insurance through a state fund, which provides $300,000 in coverage per claim and in aggregate per year, along with a $25,000 claims expense allowance.

Idaho

Idaho mandates that attorneys carry malpractice insurance with a minimum coverage of $100,000 per occurrence and $300,000 as an annual aggregate.

New Hampshire

While New Hampshire doesn't require attorneys to carry malpractice insurance, they must disclose to clients if their coverage is below $100,000 per claim and $300,000 in aggregate or if they have no coverage at all. They must also inform clients if their coverage is terminated or drops below these levels.

New Jersey

New Jersey doesn't require malpractice insurance for private practitioners. However, limited liability firms must carry $100,000 in coverage for each attorney and register the evidence of this coverage.

Alaska

Although Alaska doesn't mandate malpractice insurance, attorneys must notify their clients in writing if they don't have coverage or if their coverage is below $100,000 per claim and $300,000 in aggregate. They must also inform clients if their coverage is terminated or drops below these levels.

These are just a few examples of how certain states require attorneys to carry malpractice insurance if they meet specific criteria. It's important to note that even in states without these requirements, attorneys may still need to disclose their insurance status to clients or the state.

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