Legal Malpractice Insurance Rates

Malpractice means wrong actions which are carried out by an individual thereby resulting in injuries or damages to client, at the time of providing services to him. The professions which are most prone to litigation are doctors and attorneys and so it's important that they carry malpractice insurance. Over the years legal malpractice insurance rates have risen steadily due to the realization that these professionals can be sued. There are different rates of legal malpractice insurance and that depends on the state where a person lives in. Many a time a attorney may choose the state in which he wants to practice depending on malpractice insurance costs.

How Much Does Legal Malpractice Insurance Cost

Just like an any other insurance, legal malpractice insurance rates vary. There are several insurance companies which offer malpractice insurance, but the deductibles and insurance rates offered by each company differ. This type of insurance pays for defense of an attorney, besides any fines in terms of money which he may have to pay. Let's take an example, say a attorney, due to lack of knowledge of a particular law lost a lawsuit. If the client files a lawsuit against the attorney, the attorney is liable to pay the expenses if he is found in error. This is where a attorney with malpractice insurance would be saved of a hole in his pocket as it's the insurance company which would pay the client.

One of the most important factor which determines the cost of legal malpractice insurance is the size of the firm. The insurance rates offered for an attorney working in a large firm is comparatively lower than a mid-sized firm or those who practice alone. Usually the rates are in the range of US $4,000 to $8,000 every year. There are several local bar associations which offer legal malpractice insurance at a discount, but that too depends on the location of the legal practitioner.

Average Cost of Legal Malpractice Insurance

There are several factors which are taken into consideration to determine the cost of legal malpractice insurance. Different insurance providers have their own set of premiums for legal malpractice insurance, and that's based on the number of incidents wherein a litigation has been filed. Moreover, these insurance companies also assess the risks associated with each individual lawyer, whether it's a real estate attorney or attorney who specialize in any other field. This means that the insurance providers takes a good look at the field in which an attorney specializes. Some may specialize in divorce, while others in personal injury and real estate. A personal injury lawyer who deals with personal injury claims for their clients, are more at risk of getting into a legal soup. A divorce attorney, who represents his client in a lawsuits that may involve millions of dollar alimony, is also at the risk of being sued for the damages if he loses.

Data which has been provided by the insurance providers have shown that lawyers who deal with cases related to property damage, besides those who deal with personal injury pay the highest malpractice insurance rates.

Another factor which is taken into consideration is the length of service. An attorney who has been in the legal profession for a long time, will need to pay less towards legal malpractice insurance as compared to an attorney who has not served that long. Moreover, the activity in which a attorney has been engaged in when the omission or error took place is also taken into consideration while deciding the amount which the lawyer has to pay his clients.

So all in all, legal malpractice insurance rates are beneficial for legal practitioners if they find themselves defending a litigation against their clients. It serves as a protection against damages which they may have to pay. But it's important to note that before going for this type of insurance, you read the terms and conditions so that you know the amount you need to pay, and the penalties which may be there if you don't pay the premiums on time.