Many people do not realize that some attorneys carry professional indemnity insurance protection in case they are sued by clients. This is also called legal malpractice, but it applies to legal actions brought against them for the failure to provide reasonable competent services Attorneys who practice in certain fields of law may not maintain indemnity insurance if the type of cases they handle will have little chance of a legal discrepancy. However, there are attorneys who practice in the financial industry as consultants who do consider malpractice insurance an absolute necessity because clients could be more likely to file a legal action when there is a significant amount of money involved in the dispute.
High-risk practice areas
While some attorneys have few cases when they may need extensive malpractice insurance, attorneys who prepare and protect intellectual property documents should always have appropriate protection. These are essentially service contract lawyers with client assets to protect, many of which focus primarily on owning patents or investing in certain financial market areas. Not only do products such as software need protection, many times private company information could be exposed as well due to improper filing or failure to address certain company legal needs.
Low-risk practice areas
There are certain legal areas where a seemingly low-risk relationship could result in a valid legal malpractice claim, such as when a personal injury attorney fails to comply with the statute of limitations. Attorneys in low-risk practice areas typically are not sued for significant damages, but do incur legal actions occasionally for smaller amounts due to specific minor financial disputes.
It is important for anyone with a potential lawyer malpractice case to understand that many attorneys will not sue other attorneys as a matter of professional respect. Having the right attorney is not only vital, but finding the right attorney can be challenging.