Lawyers’ Professional Liability Insurance (LPLI), also known as legal malpractice insurance, protects attorneys and law firms against claims of negligence, errors, omissions, or other issues that arise from the legal services they provide.
Here’s a breakdown of what it is, what it covers, and why it’s important:
🔍 What Is It?
Lawyers’ Professional Liability Insurance is a claims-made policy, meaning it only covers claims:
- Made during the policy period, and
- Arising from acts committed after the retroactive date (if any).
✅ What Does It Cover?
- Negligence: Failing to meet the standard of care expected from a lawyer (e.g., missing a deadline or filing the wrong documents).
- Errors & omissions: Mistakes in drafting contracts, failing to advise a client properly, etc.
- Defense costs: Legal fees, court costs, and settlements—even if the claim is baseless.
- Malpractice suits: Lawsuits from former or current clients alleging harm due to your legal services.
🚫 What It Does Not Cover (Typical Exclusions)
- Criminal acts or intentional misconduct
- Claims arising from business interests outside of legal work
- Known claims prior to policy start
- Bodily injury or property damage (usually covered by general liability insurance)
- Employment-related claims (may require EPLI coverage)
💡 Why It’s Important
- Client protection: Many clients require proof of coverage before hiring a lawyer.
- Risk management: Even a minor mistake can lead to a costly lawsuit.
- State requirements: Some states mandate disclosure of whether a lawyer carries malpractice insurance.
💰 Cost of Coverage
- Depends on:
- Firm size
- Practice areas (litigation and securities law are higher risk)
- Claims history
- Location
A solo practitioner might pay $1,000–$3,000/year, while larger firms may pay tens of thousands.
🏢 Common Providers
- ALPS
- CNA
- Hanover
- AXA XL
- Travelers
- Swiss Re