Are Law Firm Malpractice Risks Growing?
Over the past several years, there has been a steady increase in malpractice claims against attorneys. While these figures continue to increase each year, some resulting in immense damage loss, it is crucial to protect your clients with a Professional Liability for Attorneys policy.
A survey by Ames & Gough indicated the trend of malpractice suits by polling nine professional liability lawyers at insurance companies that provide coverage to an estimated 80 percent of the top law firms. The survey discovered that five insurers experienced similar claims as 2014, two had an increased number of claims, and two others reported they saw fewer claim activity than the prior year. However, the claim payments are substantial this year. For example, 67 percent of the insurers paid, or participated in paying, claims that were upwards of $20 million, three of which were between $50-100 million.
The common areas that see the most claim activity include trusts and estate practices. While real estate held the record for most claims for four years straight, trusts, estates and probate laws combined accounted for two-thirds of the insurers highest claim source. The initial real estate claims resulted from the hard hitting recession and have since recovered greatly. The American Bar Association also adds that administrative errors account for approximately 28.5 percent of reported claims. This includes failure to file documents correctly, failure to manage the calendar or delegate tasks, and errors in mathematical calculations.
Another factor that contributes to an increase in malpractice suits is cyber liability. Although this issue is not as prominent as one might expect due to the technological advancements in recent years, three of the nine insurers reported a cyber-network security claim.
At PL Risk, we understand the inherent risks your clients face daily. We offer broad insurance programs designed to address your client’s specific needs in addition to competitive pricing. For more information about our professional liability policies, as well as our other business insurance solutions, contact us today at (855) 403-5982.
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