The California Attorney Malpractice Insurance Checklist: 5 Things You Should Know
California attorney malpractice insurance for solo practitioners and small law firm owners can be a vital tool to help protect your law office’s financial solvency and your peace of mind. Yet, there may be hesitancy to purchase coverage because of various concerns. The good news is, we created a checklist about California attorney malpractice insurance that may help provide greater peace of mind when selecting malpractice insurance coverage.
The main five things you should consider are:
- Malpractice Insurance requirements for law firms practicing in California;
- Whether a malpractice insurance carrier is admitted in the State of California;
- Researching the companies offering attorney malpractice insurance;
- The price of attorney malpractice insurance in California; and
- Understanding some examples of what may trigger a legal malpractice claim.
However, before we look at these items on the checklist, let’s first answer one specific question. Are California attorneys required to carry malpractice insurance?
Are California Attorneys Required to Carry Malpractice Insurance?
According to The State Bar of California’s website, there is no insurance requirement except for limited liability partnerships or law corporations. These exceptions exist because of state statute. However, it is vital to note that the Bar is currently considering amending the rules requiring active attorneys to disclose to clients and to the Bar that they do not carry malpractice insurance.
Although carrying malpractice insurance may not be a requirement for many California attorneys, it’s not without its risks. Some of the most common causes of loss come from things that appear, on the outside, to be relatively mundane activities. Yet, they carry the risk of having a legal malpractice claim filed against you.
- Legal strategy errors;
- Conducting an inadequate investigation;
- Conducting inadequate discovery;
- Failure to inform clients of required information;
- Failure to receive required client consent;
- Failure to recognize or comply with appropriate deadlines as required; and/or
- Failure to file documents.
The above list does not constitute a complete list of the reasons that a legal malpractice claim may be filed against an attorney. It is only a list of some of the most common claims. We hope that by sharing this list with you that you’re able to better assess the risk within your solo office or small law firm.
Now, let’s explore the five things you should know when considering attorney malpractice insurance.
Are They an Admitted Attorney Malpractice Insurance Carriers in California?
When researching attorney malpractice insurance carriers in California you’re potentially interested in doing business with, you can:
- Determine if they’re admitted to doing business in California. Admitted means that the carrier is licensed to write and sell insurance in that particular state, in this case it would be California. The benefit of purchasing insurance issued by an admitted carrier(s) is that if an admitted carrier fails financially, a state’s guaranty fund will make claim payments as necessary.
When you’re exploring potential malpractice insurance providers, longevity is a concern. Look for a leader in the industry with decades of experience and service.
Researching Companies Offering Attorney Malpractice Insurance in California
At this time, you’re now in a better place to research the companies offering attorney malpractice insurance in California.
Here are some points to review during your research:
- Determine how long the insurance provider has been part of the marketplace;
- Evaluate whether the insurance provider caters to your practice type and firm size;
- Look around for other resources provided by the insurance provider. Do they provide templates, forms, or other valuable risk management resources for your practice?
Choose a malpractice insurance provider that can help safeguard your livelihood as an attorney and as a small business owner.
How Much Is Attorney Malpractice Insurance in California?
The cost of attorney malpractice insurance in California depends on various factors. Ultimately, you get what you pay for. It is never wise to purchase attorney malpractice insurance solely on the lowest possible price. Instead, you should select the coverage tailored to your business to help safeguard your career.
As you’re looking over your options, consider the other features that a provider offers you.
- Templates and forms useful for your practice;
- Up-to-date best practice guides;
- How easy it is to initiate your coverage;
- Whether or not you must pay your deductible in advance; and
- Free continuing education classes (CLE) classes.
The price isn’t just about the coverage. It is inclusive of the entire experience of working with a provider.
Know What May Trigger a Legal Malpractice Claim
Because your insurance rates and professional reputation rely on your actions, you should recognize some of the actions that may trigger a legal malpractice claim.
They may include:
- Failure to know or apply relevant law;
- Poor drafting of legal documents;
- Procrastinating and missing deadlines; and
- Suing an incorrect party.
Again, this isn’t an exhaustive list of what may trigger a legal malpractice claim. Some practice areas are riskier than others. Yet, that doesn’t mean that you should forgo this type of coverage if you’re offering legal services in a low-risk practice area.
Looking for California Attorney Malpractice Insurance?
For over 40 years, Aon Attorneys Advantage has offered attorney malpractice insurance with a focus on solo practitioners and small law firms. We work with an AM Best A-Rated carrier so you can rest assured.
Get a free quote today.
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.