If you are a lawyer or studying to be one, what do you need to know about professional liability insurance? A lot. So, we thought we'd help out and give you an overview so you’re prepared.
What is professional liability insurance?
It is insurance that can provide monetary assistance if a client, a former client or a third party sues you. The insurance can also provide payment if you settle out of court or go to court and are ordered to pay a sum of money. Professional liability insurance can help with legal fees and other related costs as well.
So, it covers everything a lawyer might do if sued?
Yes and no. Professional liability insurance can cover a lawyer who is sued for professional services, if whatever happened was not intentional or criminal. Professional liability insurance can also cover a lawyer who is sued for legal advice that ended up costing the client in the end. However, it will not cover third party injuries in the office; that falls under general liability insurance.
Now that you know what professional liability insurance covers, do you need it?
The statistics show that a lawyer has a 50 percent chance of being sued for professional services over the course of his or her career. It’s worth considering this valuable coverage to protect your firm’s assets.
What are some examples of when a lawyer may need to use professional liability insurance?
- A lawyer drafting a contract for a restaurant franchise, which didn’t pan out. The restaurant owner then sued the lawyer for negligent advice.
- A paralegal gave advice while working for a lawyer. The lawyer was sued due to the bad advice given by the paralegal.
- A person was tried in court for a felony and was convicted. The person sued the lawyer for bad counsel.
That is just an overview and if you contact your independent insurance agent, you can find out how much professional liability insurance you need and exactly what it covers in your state.
Get the right protections for your business. Call Avanti Associates at (914) 273-8511 for more information on Armonk professional liability insurance.