Why Your Law Firm Needs Professional Liability Insurance
They say mistakes are excellent learning opportunities. However, for law firms, all it takes is just one simple mistake for your firm to be on the receiving end of a lawsuit that could cause financial and reputational devastation. The best way for a lawyer to be protected from the impact of a lawsuit alleging negligence or malpractice is to carry professional liability insurance. This type of insurance acts as a buffer between your law firm and the potential for financial catastrophe if you’re sued by an unhappy client.
Here are the top 7 reasons lawyers need professional liability insurance:
Provides Protection from Common Risks
Simple day-to-day operations of a law firm can put it at risk. Even the best lawyers will inevitably make mistakes during their careers. A professional liability insurance policy typically provides coverage for:
- Undelivered services
- Missed deadlines
- Breach of contract
Your insurance policy can help remove the burden of claims from your shoulders, ensuring you’re not left to pay the expenses of a lawsuit out of your pocket.
Protects Your Business Assets When You’re at Fault
Professional liability insurance can protect your practice from a lawsuit that could become quite costly. In today’s highly litigious society, people are quick to file lawsuits if their expectations are not met or they feel that any wrongdoing has occurred. If the claims made by a disgruntled client are legitimate, you’ll be responsible for thousands of dollars in court costs and lawyers’ fees, not to mention the financial burden of settling a case or paying damages.
Professional liability insurance is a cost-effective method for accessing capital to cover the cost of an E&O lawsuit. It keeps you from having to bankrupt your law firm to settle or pay for a lawsuit. What’s more, insurance can assist with defense costs and indemnity payments. The decision to have this policy can help keep your practice intact.
Prevents Financial Devastation from Frivolous Lawsuits
No matter how hard your work to deliver quality services, a disgruntled client may still take issue with the advice or services you’ve provided and decide to file a claim. Even if you haven’t made a mistake, a frivolous lawsuit has to be defended and that could mean spending thousands of dollars in attorneys’ fees and lost time, especially if the suit drags on for weeks or months.
Thankfully, professional liability insurance also provides coverage for meritless claims brought up by vindictive clients, so you’re not left with a massive bill or potential bankruptcy just to defend your good name in court.
Saves You Money
Many lawyers make the mistake of not investing in errors and omissions insurance to “cut costs.” But look at it this way: would you rather pay monthly premiums or a large sum of an unforeseen lawsuit? If you don’t have professional liability insurance, you’ll be on the line for legal fees, litigation, out-of-court settlements, lost wages, damages, and so on.
Professional liability insurance is all about risk management. You pay small premiums upfront to avoid having to pay a much larger and unexpected amount down the line.
Gives You Peace of Mind
One of the most significant reasons you need professional liability insurance is the peace of mind it provides. Involvement in a professional liability claim can be incredibly overwhelming and stressful. But when you have the right E&O coverage, you can have some solace that all will not be lost. You’ll know that your policy will cover everything or most of what is needed to be covered.
Shows a High Level of Professionalism
Your clients rely on you for professional expertise. Carrying professional liability insurance sends a message of professionalism and demonstrates to your clients that you are serious about their well-being. Having adequate insurance lets them know your law firm is capable of backing up the services provided should anything go wrong. Also, it’s not uncommon for clients to request proof of coverage before hiring an attorney.
Protects Your Reputation
You’ve worked hard to build a strong client base and reputation for your law firm. But one legal malpractice lawsuit brought against you can ruin all that you’ve worked for in the blink of an eye. Professional liability insurance can help protect your reputation as a lawyer. Having a policy shows clients that you value your good name and are going to do what it takes to right potential wrongs.
Professional liability insurance also allows you to find a more-than-just competent attorney for your defense.
Get a Quick Quote Today!
Attorneys First Insurance offers top-tier professional liability insurance that offers protection to lawyers and title agents from an array of exposures they face. We approach every client’s situation carefully to provide coverage customized to their risks and needs. Our team ensures you get the right amount of coverage and still make considerable savings. Contact us today to schedule a consultation and get a quick quote.