Jeffrey Wade
When hiring a lawyer, it is important to ensure they have malpractice insurance. While most states do not require attorneys to carry malpractice insurance, it is one of the most important areas of liability coverage a law firm or practicing attorney should purchase. In the event of malpractice or negligence, malpractice insurance provides valuable protection for both the lawyer and the client. To find out if your lawyer has malpractice insurance, you can look them up on the state bar association website or simply ask them directly.
| Characteristics | Values |
|---|---|
| Insurance requirements | Most states don't require legal malpractice insurance. |
| Alaska, Delaware, Florida, Georgia, Illinois, Indiana, and California don't require attorneys to carry malpractice insurance. | |
| California, however, requires lawyers without insurance to disclose that fact to their clients. | |
| In California, if you practice as a shareholder of a professional law corporation, a partner in a firm organized as an LLP, or as a Registered Foreign Legal Consultant, you must carry malpractice insurance or establish other financial responsibility arrangements. | |
| Illinois lawyers must report whether they carry malpractice insurance to the ARDC. | |
| In Alaska, attorneys must notify clients if their malpractice insurance coverage is less than $100,000 per claim and $300,000 aggregate. | |
| Finding out if your lawyer has malpractice insurance | Check with your state's Bar Association or the ARDC's Lawyer Search feature. |
| Ask your lawyer directly. | |
| Cost | The cost of malpractice insurance for a solo practitioner is likely to be $3,000 or less per year. |
| The cost of malpractice insurance depends on the number and types of cases handled, the potential amount of damages and defense costs, and the nature and extent of both business and personal assets. | |
| Rising insurance premiums are projected for law firms this year. |
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State requirements
While most states do not require attorneys to carry malpractice insurance, some states have specific requirements. Here are the state requirements for malpractice insurance for lawyers:
Alaska
Attorneys in Alaska are not mandated to carry malpractice insurance. However, they are obligated to inform their clients if their coverage is below $100,000 per claim and $300,000 in aggregate. Alaska lawyers must also be members of the Alaska Bar Association, pay annual registration fees, demonstrate good moral character, and abide by the rules of the Bar association.
California
California does not require lawyers to possess liability insurance. Nonetheless, the Rules of Professional Conduct in California mandate that lawyers without insurance inform their clients of this fact. If a lawyer fails to provide this disclosure, it could lead to the voiding of their fee agreement. Shareholders of professional law corporations, partners in Limited Liability Partnerships (LLPs), and Registered Foreign Legal Consultants are, however, required to carry malpractice insurance or establish alternative financial responsibility arrangements.
Colorado
Colorado lawyers practising private law are not compelled to carry malpractice insurance. Yet, they are mandated to report to the Colorado Supreme Court Attorney Registra.
Delaware
Delaware lawyers are exempt from the obligation to carry malpractice insurance. They must, however, be members of the State Bar Association, submit annual registration fees, and demonstrate good moral character.
Florida
Florida does not require lawyers to carry malpractice insurance, but they must report annually whether they have insurance when they register. Similar to other states, Florida attorneys must be members of the Florida Bar Association, pay annual registration fees, and demonstrate good moral character.
Georgia
Georgia lawyers are not required to carry malpractice insurance. They must, however, be members of the State Bar, submit annual registration fees, and maintain good standing with the Bar association.
Illinois
Illinois lawyers are not mandated to carry malpractice insurance. However, they are required to disclose their insurance status to the ARDC (Attorney Registration and Disciplinary Commission) and answer questions about their professional liability insurance every other year when renewing their practice authorisation. Additionally, Illinois attorneys must be members of the State Bar of Illinois, pay annual registration fees, and demonstrate good moral character.
Indiana
Indiana, like many other states, does not require its lawyers to carry malpractice insurance. Indiana attorneys must be members of the Indiana Bar Association, submit annual registration fees, and maintain good standing with the Bar association.
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Lawyer search tools
While most states don't require attorneys to carry malpractice insurance, it is still important to ensure your lawyer has malpractice coverage. Mistakes can be costly, and malpractice insurance provides a safety net for both the lawyer and the client.
If you are in Illinois, you can use the ARDC's Lawyer Search feature to find out if your lawyer has malpractice coverage. This will also tell you if the lawyer has been disciplined by the bar for ethical reasons. Alternatively, you can simply ask your lawyer if they have malpractice insurance coverage. If they do not, it is reasonable to ask them about their decision and the risks this creates for you as the client.
In California, you can find information on carriers that write legal malpractice insurance on the website of the State Bar of California. The website for the American Bar Association also has information on some carriers. If your lawyer works for a firm, you can check if the firm has malpractice insurance, which would cover your lawyer.
If you are in Alaska, lawyers must notify clients if their malpractice insurance coverage is less than $100,000 per claim and $300,000 aggregate. In Delaware, Florida, Georgia, and Indiana, there is no requirement for attorneys to carry malpractice insurance, but they must report whether they carry insurance or not.
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Pro bono work
Lawyers should ensure that their malpractice insurance covers pro bono work, as most policies do, but it is always good to confirm. Claims arising from pro bono activities are very rare, and most states do not require attorneys to have liability insurance to practice law. However, insurance coverage can provide peace of mind and protect lawyers in the rare event of a mistake or claim.
When taking on pro bono work, lawyers should be mindful of the potential for liability and approach cases with thorough preparation, diligent work, and adherence to professional standards. It is also important to establish clear boundaries and a formal attorney-client relationship, including a retainer agreement, to avoid misunderstandings and unrealistic expectations.
In terms of finding pro bono opportunities, lawyers can look for established organisations that provide structure, support, and resources for pro bono cases. These organisations often offer training and mentoring to volunteer attorneys, which can be especially helpful when branching into new areas of the law. Additionally, lawyers can inquire about malpractice insurance coverage provided by pro bono and legal aid agencies when taking on volunteer work.
Overall, pro bono work can be a rewarding experience for lawyers, allowing them to help those in need while also gaining valuable experience and contributing to society. By being mindful of potential risks and taking the necessary precautions, lawyers can confidently engage in pro bono work and make a positive impact.
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Costs
The cost of malpractice insurance for lawyers depends on a variety of factors, including the size of the firm, the number and types of cases handled, the potential amount of damages and defence costs, and the nature and extent of business and personal assets.
For example, in California, insurers are projecting rising insurance premiums for law firms due to hedging against rising costs and larger malpractice damages. However, there are many carriers in California competing for business, and it is recommended to shop around and obtain quotes to find the best value.
In Illinois, malpractice insurance for solo practitioners is considered relatively inexpensive, with coverage for a solo practitioner likely to be $3,000 or less per year. In contrast, Joshua Rohrscheib, the owner of Onward Injury Law, a Central Illinois personal injury law firm, states that his malpractice coverage was under $1,500 per year when he left solo practice in 2015, which was probably lower than average as he was a relatively new lawyer and took advantage of discounts for younger lawyers.
It is worth noting that some states, such as Alaska, Delaware, Florida, Georgia, and Indiana, do not require attorneys to carry malpractice insurance. However, some of these states, like Alaska and Florida, have specific requirements regarding disclosure of insurance coverage status and the amount of coverage.
While malpractice insurance is not mandatory in all states, it is still crucial for lawyers to carry it to protect themselves and their clients from the financial consequences of any mistakes or errors made while providing legal services.
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Reasons for no insurance
While malpractice insurance is a requirement for lawyers in some states, it is not mandatory in others. For example, Alaska, Oklahoma, Delaware, Florida, Georgia, Illinois, and Indiana do not require attorneys to carry malpractice insurance. However, even in states where it is not mandatory, lawyers may still choose to purchase malpractice insurance to protect themselves from potential lawsuits.
There can be several reasons why a lawyer might not have malpractice insurance, even in states where it is not required:
- Cost: Malpractice insurance can be expensive, and some lawyers, especially those practicing solo, may find it unaffordable. In California, 66% of uninsured solo attorneys cited cost as the main reason for not having insurance.
- Belief in low risk of being sued: Some lawyers, particularly those in solo practice, may believe that they are unlikely to be sued due to the nature of their practice. In California, 29% of solo attorneys without insurance believed they were not at risk of malpractice claims.
- Lack of awareness: Some lawyers may not be aware of the potential benefits of malpractice insurance or may underestimate the risk of being sued. They may view it as an unnecessary expense and decide against purchasing coverage.
- Limited availability: In certain states or regions, the availability of malpractice insurance providers may be limited, making it difficult for lawyers to find suitable coverage options.
- Specialization: Lawyers working in certain areas of law may perceive their risk of malpractice claims as lower compared to those in more litigious practice areas. For example, a lawyer specializing in estate planning may believe that malpractice insurance is unnecessary due to the perceived low risk of claims.
- Part-time practice: Lawyers who practice part-time or have a limited caseload may not consider malpractice insurance a necessity, especially if they believe their risk of claims is reduced due to their lower volume of work.
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Frequently asked questions
In some states, lawyers are required to disclose whether they carry malpractice insurance. In California, for example, lawyers must disclose this information when registering. In Illinois, lawyers must report whether they carry malpractice insurance to the ARDC, which can be found on their website. If you are unsure, it is best to ask your lawyer directly.
If your lawyer does not have malpractice insurance, it is recommended that you ask them about their decision and how this may impact you as a client. While it is not a legal requirement in most states, malpractice insurance is considered an important safety net for both the lawyer and the client.
If your lawyer is uninsured and makes a mistake, they may be considered 'judgement proof', meaning they could file for bankruptcy to avoid a malpractice claim. This would leave you without recourse to claim any damages.
If your lawyer is working for a firm, the firm's malpractice insurance may cover them and, by extension, you. If your lawyer is working solo, you may not be covered, and it is recommended that you seek legal representation elsewhere.
