Many businesses and professionals face frivolous lawsuits as a result of their work, but lawyers probably face this more than anyone else. The source of these lawsuits can be unpredictable, and without insurance you could be left with tens of thousands of dollars in legal defense bills paid out of pocket. With the proper insurance, though, you can rest easy, knowing that you won’t have to come out of pocket to defend yourself from frivolous lawsuits.
What are some examples of frivolous lawsuits that lawyer’s professional insurance would cover?
- You lose a case due to no fault of your own, but your client feels that you lost the case due to ‘incompetence’ or some other unsubstantiated error. They file a complaint against you with your State Bar. This situation can cost thousands or even tens of thousands of dollars in your own defense. You must pay to defend yourself even if the complaint is dismissed – insurance will cover these disciplinary defense proceedings, often without a deductible.
- You share an office with another attorney, and they are sued by one of their former clients over a business transaction that did not meet their expectations. They sue you as well, claiming that you were also their attorney since you shared an office with their actual attorney. This can also cost tens of thousands in defense costs which would be covered by insurance – it also helps to get something signed by clients of another attorney that you share space with stating that you are not representing them.
The problem is, that sometimes after an insurance company covers you for such a frivolous claim, they will cancel, non-renew or increase the price of your insurance policy. At the end of the day, these carriers are looking to make a profit, and if they pay a claim they might view you as a bad bet, even if you fixed the problem (perhaps you stopped sharing an office with another attorney).
This problem is compounded by the fact that your claims history follows you and affects your eligibility for insurance elsewhere. Solving this problem requires a broker that has specialized access to and experience with certain insurance carriers that have a higher risk tolerance.
If you find yourself in a situation where you’ve faced a frivolous lawsuit (with or without insurance), and you now want to acquire insurance for the first time or replace your canceled or more expensive policy, reach out to Mighty Oak.
We specialize not only in lawyer’s professional liability but also professionals with a claims history.