No one likes to spend money they don’t have to, and some lawyers believe they can get by without malpractice insurance. After all, only about 6% of lawyers are sued for malpractice annually. Everyone always asks, how much is legal malpractice insurance? Although that is a valid question, the more important question is, how much are you willing to risk by not carrying legal malpractice insurance?
If you are sued by a client, consider the number of billable hours that it will take to defend yourself and your firm against the claim. You may have other staff working on the lawsuit instead of billing time for clients and earning money for your firm. Your annual revenue would be severely damaged, depending on the complexity of the case.
Do you have the reserve funds in an account to pay for damages if the case gets that far? The average cost of a closed claim can reach around $100,000. A simple error by a staff member who doesn’t meet a filing deadline could cost you dearly without malpractice insurance.
How much is legal malpractice insurance? Whatever your annual premium is, the cost is far less than any potential lawsuit. You will have peace of mind when you carry the malpractice insurance that fits your firm’s needs, whether you are just starting out as a lawyer or just hanging out your own shingle. Don’t try to scrimp on this necessity.