The area of legal malpractice is a little confusing. Generally, suing an attorney who doesn’t have law firm liability insurance won’t result in much for the person suing. However, if you do get sued and don’t carry coverage, then it can be very damaging to you and your firm.
Basically, if you don’t have law firm liability insurance, you may not be able to be sued by a client. However, clients still have the right to sue, so it isn’t enough to avoid getting the insurance in hopes clients will not sue you because you aren’t covered. If the person decides to go ahead with their claim, you will be responsible for covering all incurred costs, including any awarded damages. This can be devastating. It is simply not a situation that you want to find yourself in.
If you do have coverage, the insurance will help you with defense costs and cover damages that you may be ordered to pay. It’s important to note that if you have coverage, the insurance company will defend you against the claims. However, it is important to note that what exactly is covered is dependent upon your specific policy. Some policies won’t cover certain situations, like fraud, or don’t offer full coverage.
As with any type of insurance, law firm liability insurance is important because it covers you just in case something happens. You can never know when a client may decide to sue you, so it is better to be prepared than be caught unprepared.