Why You Need Professional Liability Insurance: Assumptions and Myths

By Jack Witherspoon, Senior Associate/Product Manager at Mercer


Imagine the most significant legal case of your life. But there’s something different about this case: You’re not only the attorney, you’re the defendant. A client is suing you for malpractice, and the damages could be significant. In such a circumstance, having professional liability insurance could save your career. It could help ensure you have the resources to provide a strong defense and protect yourself financially. Maybe you’re thinking: “I know the law, I do my job well, and I don’t make mistakes.” No doubt, you and everyone in your firm work diligently to make sure you serve clients flawlessly. Nevertheless, mistakes certainly can happen in the fast-paced legal world, and lapses in professional judgment may occur. As a result, even the most experienced attorneys are at risk of having a malpractice claim brought against them. For a bit of perspective, consider this: according to the ABA’s Profile of Legal Malpractice Claims, firms with 5 or less attorneys represented 62.5 percent of all claims in the study.

Protection against “Errors and Omissions” Any mistake that results in expense or losses to your client — or a situation where negligent delivery of professional services has been alleged — could lead to a malpractice claim. In the insurance industry, this is referred to as “Errors and Omissions.” Sometimes the word “error” is simply used to describe a mistake or lapse in services to a client. For instance, you or your firm could be sued for: • Misfiled or delayed paperwork • Failure to know the law or how it applies to a case • Inadequate counsel or failure to gain client consent • Lack of thorough investigation • Conflict of interest or fraud If a client perceives that you’ve been negligent, you could find yourself or your firm faced with a lawsuit. For all these reasons, Professional Liability Insurance is a must for law firms of any size. It protects you and your firm against claims of professional negligence; potential mistakes of current or past staff members; and disciplinary or regulatory complaints. Build client trust It’s important to note that California law requires attorneys who do not have Professional Liability Insurance to disclose that fact to their clients. Also, you’re required to maintain malpractice coverage to participate in the lawyer referral system. In other words, not having insurance could cost you clients and opportunities to expand your practice. Yet, the State Bar of California Malpractice Insurance Working Group conducted a study in 2018 and found that 39% of solo practitioners reported that they were not insured. Uninsured attorneys responded that 66% believed they could not afford insurance. However, there are a variety of coverage options available to suit specific circumstances — including new admittees, corporate and moonlighting, low bono, and others. The question really is, can you afford NOT to have Professional Liability Insurance. Additional Benefits of LPL Some carriers provide CLEs, research systems, and other support. In addition, some policies include coverage to protect you and your firm against the financial consequences of cyber-crime — including data breaches and claims alleging the unauthorized release of confidential client information. There is also the intangible, but significant, benefit of peace of mind. You understand how quickly the cost of a lawsuit can add up. With Professional Liability Insurance, the financial obligation is transferred to the insurance company. This allows you to stay focused on doing what you do best: practicing law.

Jack Witherspoon has over 35 years’ of experience in the Professional Liability Insurance marketplace. He has developed his skills as a Carrier Underwriter, Program Manager, and National Sales Manager. Learn more about the State Bar of California Sponsored Professional Liability Program at

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