Consider all of the myths you’ve heard during your life. Some are quite convincing, others not quite as much. When it comes to myths that are convincing, many of us were taught that we can see the Great Wall of China from outer space. This is a myth. No human structure on our planet is visible from space, but at night cities are visible because of their lights. You can learn more about interesting myths that many of us believe to be true (such as how salt really doesn’t make water boil faster) by reading this article by Reader’s Digest. 

While those myths are fun examples, there are lawyer malpractice insurance myths that many small law firm owners and solo practitioners have. In this blog post, we are debunking the top five lawyers malpractice insurance myths:

• Clients think you’re incompetent because you carry lawyers malpractice insurance.
• Lawyers working in low-risk practice areas shouldn’t purchase lawyers malpractice insurance. 
• Of Counsel attorneys need their own coverage for work performed for a designated law office
• Contract attorneys working for a small firm aren’t covered by a firm’s lawyers malpractice insurance.
• A lawyers professional liability policy covers acts regardless of the retroactive date 

Here’s the truth about these five myths:

Myth #1 – Carrying Lawyers Malpractice Insurance Makes Clients Think You’re Incompetent

Some lawyers believe the myth that carrying lawyers malpractice insurance sends a message to clients that they’re incompetent. Why would a lawyer need insurance if they know what they’re doing? Doesn’t that make a lawyer ripe for claims? 

The truth is that it does not make clients think that their lawyer is incompetent. It also does not mean that a lawyer will likely become a target for a claim. There are certain jurisdictions that require attorneys to send out notifications to clients when the attorneys do not carry malpractice insurance or if they carry less than a certain amount of insurance. There are also some clients that require a minimum amount of professional liability coverage to be in place to begin work with them, which can become an issue when a law firm does not have the amount of coverage necessary to take on a particular client.  

Ensuring that you have a malpractice insurance policy in place isn’t about being viewed as competent or incompetent. It’s about considering what makes appropriate business sense for your practice even if you practice in a jurisdiction that doesn’t require professional liability insurance or your clients aren’t asking about it quite yet. It’s about creating a way to help protect your small law firm or solo practice and grow your business. 
 

Myth #2 – Lawyers with Low-risk Practice Areas Don’t Require Lawyers Malpractice Insurance

It’s calming to think that as an attorney working in a low-risk practice area that lawyers malpractice insurance may not be required. 

The short answer is low-risk doesn’t mean no risk. Lawyers malpractice insurance coverage offers peace of mind even for attorneys who provide services in practice areas that generally do not see as many claims as high-risk areas of practice. Coverage is a form of risk management that solo lawyers and small law firm owners can have in place to help them protect their assets. 

Not all lawyers malpractice insurance coverage is the same. Aon Attorneys Advantage can offer worldwide coverage for professional services as well as first dollar defense, disciplinary proceedings defense, subpoena assistance, loss of earnings, and mediation deductible credit.

Learn more about Aon Attorneys Advantage lawyers professional liability coverage here.
 

Myth #3 – Of Counsel Attorneys Need Their Own Coverage for Work performed for a Designated Law Office

As long as the attorney who is Of Counsel is performing work for the law office for whom they are designated, they are generally included under the terms of the coverage.

 If an Of Counsel attorney renders legal services outside of the law firm they are doing work for, such services are not subject to the firm’s coverage.
 

Myth #4 – Contract Attorneys Are Not Covered by a Small Law Firm’s Lawyers Malpractice Insurance

Contract attorneys are never covered by a small law firm’s lawyers malpractice insurance coverage. This is not accurate because if a law firm has a professional liability policy in place, then that policy would cover the legal services performed by a contract attorney on behalf of a firm, subject to a firm’s policy’s terms and conditions.  

If a contract attorney performed work for several clients, they may wish to carry their own lawyers malpractice insurance to help safeguard their business. Freelance attorneys do provide a great way for small law firms to grow their business or to get more client work done only when they need the extra help. However, even with this business model, it is important for them to take the appropriate risk management steps for their own business as well. 
 

Myth #5 – My Lawyers Professional Liability Policy Covers Acts Regardless of the Retroactive Date 

Prior acts coverage provides an insured with a retroactive coverage date. With this coverage, if you keep continuous coverage, claims made against you may be covered even if those claims are from a previous year as long as the action did not occur before the retroactive coverage date, subject to a policy’s terms and conditions. 
 

Now You Know More About Lawyers Insurance Coverage

As a solo practitioner or small law firm owner, it’s essential that you’re ready to take the steps to help better protect your practice and your peace of mind. Ready to get started? One click is all it takes to get your free quote.

_{This information is provided for general informational purposes only and is not intended to provide individualized advice. All descriptions, summaries, or highlights of coverage are for general informational purposes only and do not amend, alter, or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.}