To protect themselves, attorneys will pay for malpractice insurance. The cost for this will depend on the amount of coverage that is required, the specialty of a lawyer and the experience of a lawyer.
Years As An Attorney
It may be surprising, but the cost for malpractice insurance is less for a new lawyer than it is for a lawyer who is experienced. Typically, new lawyers will not be involved in cases that are complex. By focusing on cases that a lawyer knows he or she can handle, the risk of malpractice significantly drops. When lower risk is involved, it typically means that a lawyer will pay lower premiums for malpractice insurance. A new attorney can expect to pay around $700 per year for an average malpractice insurance policy.
Experienced Attorneys
When an attorney has been practicing for more than 10 years, the risk of a malpractice lawsuit increases due to the complexity of some cases that these type of attorneys handle. When a case becomes more complicated, it increases the chance of making an error. Of course, when higher risk is involved, it means that an attorney will be paying more for their premiums. In fact, an attorney who is experienced will likely pay between $5000-$15,000 per year for their premiums.
Coverage Required
The amount of coverage required by an attorney for malpractice insurance will vary. This factor relies on the personal assets and business assets and income of each attorney. In some cases, millions of dollars are at stake. There are also other factors to consider such as billable hours, which may be lost if an attorney is sued for malpractice.
Deductibles
A deductible must also be considered by an attorney. If they decide that they want to pay a low premium each year, it will raise the deductible that they will have to pay if they are sued. An attorney must decide if they can afford to lose a certain amount that equals the deductible that they choose. Otherwise, they’ll need to pay a higher premium so that they have a lower deductible to pay if a problem occurs.
Practice Areas
Some of the highest areas where there is a risk of malpractice is when an attorney specializes in Probate Law, Personal Injury, Real Estate or Corporate Law. In contrast, attorneys who practice in the areas of International Law, Labor, Tax, Criminal Law and Insurance Defends will see a lower number of claims made against them
Jim Treebold is a North Carolina based writer. He lives by the mantra of “Learn 1 new thing each day”! Jim loves to write, read, pedal around on his electric bike and dream of big things. Drop him a line if you like his writing, he loves hearing from his readers!