In an age of increasing litigation, attorneys know better than perhaps any other professionals the need for a good insurance package. For attorneys professional liability insurance is a crucial part of their business plan. In general, liability covers situations where clients claim a loss from a situation. In other words, they are alleging that a person or business caused them financial loss or hardship. There are two main forms of liability insurance:
- General liability, covering harm from accidents
- Professional liability, covering contractual or business loss
Errors and Omissions
Professional liability breaks down into two parts: errors and omissions. Errors imply that the professional made a mistake in paperwork or services in some way that created a financial loss for the claimant. This could the result of a flawed contract, or from services that didn’t do what they were supposed to do. The omissions aspect of attorneys professional liability insurance deal with information or services that were left out of the business or services that were not rendered but which should have been. This might mean important disclosures in real estate that the client didn’t receive, or an inspection that didn’t occur.
Eligibility and Limits for a Policy
Some insurers mandate certain eligibility requirements, such has having at least three attorneys in the firm, or having at least a certain amount of revenue each year. There are often financial limits such as $50 million. These policies may target attorneys who deal in real estate development, Wall Street investments, and patent claims, along with collections. A good insurer will be able to create an attorney professional liability insurance policy that fits most law firms.