As is true with most liability insurance coverages, when the economy is in a down cycle, claims tend to rise. Now that we are post-recession, the frequency has leveled off but the severity of individual claims presented under Attorneys Professional Liability Insurance policies has escalated. This is due, in part, to the increased costs of defense and the longer development times for post-recession claims to present.
Areas with the Highest Volume of Claims
According to a study conducted by Ames & Gough covering the period from 2010 to 2013, the following areas of legal practice had the highest number of claims:
- Real Estate
- Securities and Trust
- Trusts and Estates
- Commercial Law
Most Frequently Alleged Malpractice Claims
- Conflict of Interest
- Procedural Errors
Checking and cross-checking for conflicts of interest, when opening a file, is of utmost importance as this continues to be the most frequently alleged error in recent years.
Another recent and growing area of concern in legal malpractice claims is coming from the cyber-security area. Half of the survey respondents had received a claim in this area. The bulk of the claims related to stolen laptops.
What You Can Do to Protect Your Firm
By understanding the origin and severity of the most common malpractice claims, you will be in a better position to institute the necessary internal controls to avoid them. Additionally, you can enlist the help of a licensed insurance agency that specializes in the area of Attorneys Professional Liability Insurance to determine the best coverages and limits for your practice.