Any lawyer can make an error when representing a client, and when that happens in your firm, you need a good insurance plan to have your back. Attorney legal malpractice insurance programs often share some similar features, all of which you should fully understand before purchasing a plan. All programs are different, but there are some provisions that will appear in almost every one.
If a former client accuses an attorney of errors or negligence during litigation (most policies will only provide coverage if this error is unintentional), the insurance company provides the lawyer’s defense when the claims make it to court. If the court rules against the attorney, the policy covers the damages that must be paid to the former client. Almost all malpractice insurance policies are on a claims-made basis, meaning that they will cover an attorney for any claims made against them during the period in which the policy is in place; when the error occurred is irrelevant. However, if your firm purchases insurance with prior knowledge that malpractice has already occurred, that is unethical and most policies have provisions that will release them from coverage obligations.
More often than not, firms never need to use their attorney legal malpractice insurance programs. However, if claims of negligence do surface, the costs of litigation and damages are usually much more expensive than the policy itself. Search carefully for the best malpractice insurance plan for your law firm.