Legal Malpractice Insurance premiums start at about the cost of a weekly trip for coffee at your favorite café.
So, is the cost of a weekly cup of coffee worth it? Attorneys going bare are in the mistaken belief that their close relationship with clients makes them immune to claims. Chances of facing a claim may be low for any one year, but over a career it is tough to not have at least been threaten with a malpractice claim. Consider that if an allegation goes to trial that the average defense cost exceed $80,000.
Legal malpractice insurance premiums vary. No two attorneys even with a “clean” record pay the same. The key factors affecting premiums are:
- Number of attorneys in the firm
- Claims history
- Practice areas
- Number of years maintaining continuous claims-made coverage
- Limits
- Location
- Type of clients
Different practice areas premiums differ 5 to 10 times. Criminal law and insurance defense are low cost practice areas; with Securities Placement, Class Action Work and Intellectual Property being the highest cost practice areas.
Premiums start for as little as $200 to $500 for a claim free attorney without coverage in lower risk practice areas but expect premiums to rise over the first 5 to 7 years due to step-rating. With adequate limits the average costs for a fully rated attorney should be $1,200 to $2,500 per year. Attorneys in higher risk practice areas should expect to pay around $3,000 to $10,000 per year. These premiums vary by state and location in the state based on the insurer’s past claim experience. Law firms are insured as an entity and the cost is on a per-attorney basis.
For attorneys, this cost is small versus the risk to one’s assets, just one coffee per week for that 1st year of coverage. Attorney Malpractice Insurance is Sleep Insurance.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080