Like medical malpractice insurance for health care professionals, legal malpractice insurance protects attorneys and other legal professionals from facing empty-handed the costs associated with a lawsuit or judgment of negligence.
When a client sues for legal malpractice, he or she is claiming that the attorney acted negligently or carelessly. Specifically, a legal malpractice suit claims that the attorney failed to act with the same reasonable level of professional skill as the average attorney in the community. A legal malpractice suit also claims that the attorney's alleged negligence harmed the client in some way and will ask for money or other damages to "make the plaintiff whole."
Clients may sue for malpractice for a number of reasons. In some cases, the client may not be pleased with how his case turned out. He may believe the attorney failed to investigate properly, or ignored important information, or simply didn't devote the minimum amount of time required for a full and fair resolution of the client's original case.
Many legal malpractice cases are based on an attorney's alleged failures in a previous case. For instance, the attorney may have lost the previous case outright, or he may have helped his client settle for a much lower amount than the client wanted or may have been entitled to receive. In order to determine whether legal malpractice occurred, the court hearing the legal malpractice case often has to consider evidence pertaining to the original, allegedly-botched case. This arrangement is known as a "case within a case" and often requires the attorney to hire a law firm with experience in the unique world of legal malpractice defense.
Whatever the circumstances of the lawsuit, most legal malpractice insurance policies will pay for the attorney's legal representation, up to the limits of the policy. Most legal malpractice insurance policies are written on a "claims-made" basis. This means that the policy covers any claim made against the attorney while the policy is in force, even if the events being complained of occurred before the policy existed.
When an attorney notifies his legal malpractice insurance carrier that a legal malpractice claim has been made against him, the carrier will usually contact an attorney specializing in legal malpractice on their insured's behalf. The insurance carrier will also usually pay this attorney's bills according to the terms of the legal malpractice policy.
Agreeing to hire an attorney and pay the representation bills on behalf of an insured does not mean the insurance carrier automatically assumes the attorney being accused of malpractice is innocent. Rather, it means the insurance carrier is fulfilling its part of the insurance contract, with the understanding that the client may be required to repay the costs of his representation if he is found liable for malpractice. The specific terms of each policy are spelled out in the policy itself, and an insured attorney should always review his legal malpractice insurance policy's terms carefully before an accusation occurs.
Join the Conversation