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Do Contract Attorneys Need Malpractice Insurance?

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By Christopher Coble, Esq. on March 10, 2015 11:16 AM

Malpractice insurance. It's something most law firm attorneys don't have to think about. They're already covered under their employer's policy.

But contract attorneys don't always have the protection of an employer's malpractice insurance policy. As a contract attorney, do you need your own malpractice insurance?

Cue the lawyerly answer: Maybe.

In Most States, Not Required by Law

In most states, attorneys are not required by law to have malpractice insurance; Oregon is currently the only state where attorney malpractice insurance is required, according to the ABA. Some states do require that attorneys without malpractice insurance disclose that fact to clients.

However, since 5 to 6 percent of attorneys face legal malpractice charges each year, malpractice insurance could be a worthwhile investment. Malpractice insurance could cover more than just the cost of malpractice judgments and settlements, but also the cost of defending a malpractice case, including the disciplinary hearing, judgment interests, and loss of earnings.

Doing Contract Work for a Law Firm

If you're working as an independent contractor for a law firm, you probably won't have to buy your own malpractice insurance. Depending on the law firm's malpractice insurance policy, contract attorneys are often covered under the firm's policy.

Working for Yourself

As a contract attorney, you won't always be working for a law firm. Sometimes you'll represent somebody yourself. Good business practice would be to get malpractice insurance.

While you may not make any mistakes, clients can turn on you if they are not happy about the results of their case. If you get sued, do you know how to defend yourself? Can you afford a malpractice attorney? Can you pay any judgments against you? If you have any inclination to answer "no" to these questions, you may want to buy malpractice insurance.

Is It Too Expensive?

A common misconception of malpractice insurance is that it is too expensive. However, malpractice insurance policies for new lawyers can start as low as $500 annually. That's less than $45 a month! The average malpractice insurance policy for an experienced attorney can range from $1,500 to $3,000 annually.

So while malpractice insurance may not be required by law where you live, it may pay off for contract attorneys who want to make sure they're protected.

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