What You Need to Know About Legal Malpractice Insurance California

In California, legal malpractice insurance is a vital protection for attorneys against potential lawsuits. California law requires attorneys to have professional liability insurance, also known as malpractice insurance.

The California State Bar requires attorneys to maintain a minimum of $1 million in professional liability insurance coverage. This is a crucial requirement for attorneys to practice law in the state.

To qualify for a malpractice insurance policy in California, attorneys typically need to have a good professional reputation and a clean claims history. A claims history that includes previous malpractice claims can make it difficult to obtain coverage.

A standard malpractice insurance policy in California usually includes coverage for defense costs, settlements, and judgments. This means that if an attorney is sued for malpractice, the insurance policy will cover the costs of defending the lawsuit.

Lawyers Professional Liability is a crucial aspect of legal malpractice insurance in California. It's a type of insurance that protects lawyers and law firms from costly claims.

Legal malpractice claims can arise from misinterpretations of the law, offering bad advice, missed deadlines, or conflicts of interest. Even the most diligent law firms can be vulnerable to such claims.

The right insurance program is a wise investment for any law firm. It helps protect against errors and misguided advice, professional negligence, and contractual liability.

Here are some key areas that Lawyers Professional Liability insurance covers:

Other potential claims that Lawyers Professional Liability insurance can cover include employment-related lawsuits, bodily injury and property damage claims, and breach of fiduciary duty.

Having the right legal malpractice insurance in California can be a game-changer for your firm.

More than a dozen major insurers cover California firms, and they compete fiercely for good risks. If your firm hasn’t incurred a claim in five or more years, and hasn’t shopped for competing quotes in two or more years, then one or more of those insurers will likely offer it much better terms than it currently has.

Attorney Protective, AXIS, and Westport usually offer the best terms to California firms.

Our process involves submitting each firm’s application to all viable insurers, based on its risk profile – typically 7 – 10 – and obtaining proposals at the firm’s current terms, and at policy limits one or more levels higher.

Legal malpractice insurance in California provides protection against a range of claims, including those related to errors and misguided advice, professional negligence, and contractual liability.

These claims can arise from misinterpretations of the law, offering bad advice, missed deadlines, or conflicts of interest, making it essential for law firms to have the right insurance program in place.

The actual coverage of legal malpractice insurance depends on the policy language, but generally includes damages arising out of legal malpractice, such as the amount of money a client could have received had the mistake not occurred.

This coverage can also include the costs of awards and settlements given to the plaintiff, up to policy limits.

Here are some examples of what's typically covered under legal malpractice insurance:

Additional coverage may also include employment-related lawsuits, bodily injury and property damage claims, potential claims you're aware of but fail to disclose, and breach of fiduciary duty.

Legal malpractice insurance in California covers the costs of legal defense, which can include hiring a lawyer to defend you.

This means you won't have to worry about racking up a large bill to pay for a lawyer to represent you in a claim against you.

The insurance also covers expenses related to litigation, such as discovery costs, which can add up quickly.

Having this type of insurance can provide peace of mind, knowing you're protected in case of a claim.

Insurance options for freelance lawyers can be complex, but it's essential to understand the basics.

Some insurance companies allow law firms to add freelance attorneys to policies without additional premiums, while others automatically cover freelance attorney work.

Freelance lawyers may choose to carry their own malpractice policies out of an abundance of caution, but many do not. This is because, in California, freelance lawyers are often viewed as high-level law clerks, legal consultants, or paralegals, rather than practicing attorneys.

If a freelance lawyer is ghost-writing for a law firm, they are not technically practicing law and therefore may not need to carry a malpractice policy. The hiring firm has a duty to review and approve the freelance lawyer's work, so they are ultimately on the hook for any potential malpractice issues.

Professional Liability policies for law firms state that coverage is based on professional services performed on behalf of the Named Insured. Freelance lawyers seeking their own policies should disclose the scope of work they are doing and who is hiring them to perform this work.

Many freelance lawyers are comfortable working under the law firm's policy and choose not to obtain their own policy. Kelley Milks, Executive Vice President of Acrisure, recommends utilizing insurance carriers or brokers who specialize in law firm coverage when seeking advice on insurance coverage.

Insurance for freelance lawyers can be a bit tricky, but it's essential to understand the basics. Some freelance lawyers choose to carry their own malpractice policies out of an abundance of caution, but many do not.

If a freelance lawyer is working for a California-barred lawyer who is counsel of record, the fees involved are not considered "attorney fees." This means that the freelance lawyer may not need to carry a malpractice policy, depending on the nature of their work.

The California Bar Association's rules are clear on this issue: freelance lawyers are viewed as high-level law clerks, legal consultants, or paralegals when they're working on behalf of a law firm. In this scenario, the law firm is responsible for any potential malpractice issues.

It's worth noting that some freelance lawyers may choose to carry their own policy despite not being required to do so. This can provide an extra layer of protection in case something goes wrong.

Here are some scenarios where a freelance lawyer might not need to carry a malpractice policy:

To get quotes from insurance providers, you'll need to have at least basic risk management procedures in place. This includes using a docket/calendaring system, conflicts-checking tool, and engagement letters/non-engagement/termination letters.

Don't apply for insurance unless you have these procedures set up, as insurers will decline your application if you answer "no" to these questions. Computerized tools like practice management software are preferred over manual tools.

Sole practitioners will need to name a back-up attorney, who will contact clients and relevant parties if you're unable to handle your cases due to an accident or illness. The back-up attorney's role is to obtain any necessary postponement or extension, and arrange for replacement counsel or take over your cases in extreme situations.

You can name any attorney barred in your state of domicile as your back-up, and most attorneys turn to a former colleague for this role.