How much does legal malpractice insurance cost?

This blog post was originally posted in 2015, and was updated October 18, 2021.  

Most professionals need insurance coverage, and attorneys and law firms are no exception. Several commercial insurance products are critically important for legal professionals. One of the most critical coverages for attorneys and legal firms is legal malpractice coverage.

Legal malpractice is a specialized type of professional liability coverage designed for all kinds of legal professionals. This insurance coverage is designed to help protect legal professionals against claims of negligence, inaccurate advice, and errors in professional judgment. The typical legal malpractice insurance policy provides coverage for damages and legal expenses, making it valuable coverage to have in place.

An important consideration is how much legal malpractice insurance may cost your firm. Several different factors comprise your rates for legal malpractice coverage, and every attorney’s premiums costs may differ.

Read on to learn more about legal malpractice insurance, how much it costs, and how to purchase it, and then contact us at Cusick Insurance Brokers, Ltd. for more information and to purchase your policy.

Law Firms, Lawyers, and Legal Experts All Need Legal Malpractice Insurance

Legal malpractice coverage is a must for many legal professionals, including attorneys, law firms, prosecutors, legal aid offices, pro bono firms, defense attorneys, and many other legal professionals. Having legal malpractice protects you from personal liability, gives peace of mind, and may be required by contract or regulation.

Most states do not require legal professionals to carry legal malpractice insurance – only Idaho and Oregon have laws mandating coverage. Other states may mandate under certain conditions or require attorneys to disclose whether they have coverage.

Ask us if you aren’t sure if you should purchase legal malpractice insurance. We’ll review your situation and help you find the right coverage for your practice.


What is covered by a legal malpractice insurance policy?

While each insurance policy differs and reading your policy thoroughly is important, legal malpractice policies often include various coverages.

  • Errors and omissions committed by you or attorneys at the insured firm
  • Legal defense costs
  • Some policies include disciplinary defense costs with no deductible
  • Some policies include some cyber liability coverage
  • Check your policy for any other coverages


Common Exclusions Found in Legal Malpractice Insurance Policies

Some standard exclusions in legal malpractice policies include:

  • Intentional acts
  • Criminal acts
  • Claims known but not reported to the insurer
  • Claims or suits between attorneys at the same insured firm
  • Bodily injury
  • Cyber events and data breaches (unless coverage is granted)

Like with any insurance coverage, read your policy and any related endorsements. Knowing what your coverage includes and excludes will help you protect your business and lower your risks. Some risks may be excluded by your legal malpractice policy but covered under another policy you own, like your Commercial General Liability policy or Cyber and Privacy Insurance coverage.


How Much Does Legal Malpractice Insurance Cost?

Several factors affect the pricing of legal malpractice insurance policies.

The number of attorneys being insured and their experience levels. This is the top factor affecting your rates when purchasing legal malpractice insurance. More attorneys equal more opportunities for risk, and less experienced attorneys also tend to be riskier to insure.

The location of your practice. The state, city, and region your law firm is located in affects your insurance costs, including your legal malpractice coverage. More litigious areas and regions with higher jury verdicts result in higher legal malpractice insurance costs. Similarly, large metropolitan areas often see higher costs than rural areas.

The areas of law your firm practices. Some legal specialties bring more significant risks, so they are more expensive to insure. Attorneys that handle volatile cases can have higher legal malpractice costs. According to the American Bar Association, the practice areas with the highest risks are personal injury (plaintiff including and especially class action or mass tort, medical malpractice and legal malpractice), real estate, and family law. We also know Intellectual Property, Securities, Entertainment/Sports, and Environmental Law are considered high risk.

Your firm’s claims history. Prior claims can be a good predictor of future claims activity, so your carrier will review your prior loss history as a factor in determining rates.

The prior acts coverage limit on your policy. The higher the number of years of prior work covered under your legal malpractice policy, the greater the cost. Typically this increase levels off after 5 years or so for each listed attorney.

The coverage limits your firm selects. The coverage limits on your policy affect your rate – higher limits afford your firm more protection and come at a higher cost. Increasing your deductible can help lower premiums as it means you are retaining more losses.

The risk management your firm employs. Law firms – and businesses in general – should employ sound risk management practices. Having and following a risk management plan can help decrease insurance costs.


Price Isn’t The Only Important Consideration When Selecting a Policy

Remember, there are many important considerations when selecting your legal malpractice insurance policy and carrier. The price of your policy is just one factor – it may not be the most important factor, though. Policy terms and conditions, exclusions, and how your carrier handles claims are also critical considerations when shopping for a legal malpractice policy.


Contact us to Purchase Your Legal Malpractice Insurance Policy

Even with the most thorough of risk management practices, every attorney is likely to face a malpractice claim at some point during their career. Whether a frivolous lawsuit or a valid claim based on a mistake you made, having the right insurance coverage in place to protect you is critical.

Guardian Brokers can help you find the right legal malpractice insurance policy for you at the best price for your firm. Contact us today to start your free quote.

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