Professionals who are related to the law industry or deal with legal matters, such as lawyers, notaries, legal consultants, and law firms, need to protect their business interests against legal claims for error, omissions, and professional neglect for both the principles and their employees as they are subject to a myriad of risks. The legal profession is rife with different types of legal risks, and many such situations may arise when a lawyer is sued. Even the lawyers have to face a legal battle. They also need to take help from other lawyers or hire them as well. Though one can act prudently while discharging professional responsibilities, mistakes can still arise. A lawyer can also be sued by a client for professional negligence. In that case, even if the verdict has gone in favor of the lawyer, he/she has to bear expenses in defending him/herself in court. The situation can become complex if the lawyer loses the case and pay the compensation.
The Lawyers Insurance Policy comprehensively covers them for all legally established claims arising from the covered perils. In simple terms, this policy helps a person get financial coverage in unfortunate and unforeseen situations. To know more about this policy, have a look at the following mentions.
Key Features and Benefits of Lawyers Insurance
This policy can help a lawyer in numerous situations to keep him/her financially safe and to provide mental peace. Here are the mentions below.
- Claims of Negligence – It is not uncommon for clients to feel they have been betrayed or cheated by their lawyer, especially when they do not win the case, or the verdict is not in their favor. In this case, a client can file a claim against the lawyer if he/she feels that there is negligence on the lawyer’s part. But this Lawyers Insurance can be a help in this situation as it takes care of the legal expenses.
- Breach of Confidentiality – The relationship between a client and a lawyer depends on trust and confidentiality. But what if the lawyer unintentionally discloses the facts about the clients to a third party? Certainly, the client can sue the lawyer on this ground. Additionally, if the client suffers any monetary loss due to this, the lawyer will be sued. This lawyer’s Insurance policy comes in this scenario to safeguard the lawyer financially.
- Administrative Errors – A lawyer has to handle a pike of valuable papers such as documents, paperwork, and errors. If the important documents are lost for which the client may have to suffer damage, or if there are any administrative issues, the lawyer will be held responsible. However, the lawyer’s Insurance will take care of the legal expenses in this case.
- Missing Filing Deadlines – A lawyer may miss the deadline for filing the document in court. There is also a possibility that he/she may forget the hearing date and may not appear in court. In this case, the lawyer can also be sued. But the lawyer’s Insurance can be a help here as it will help the lawyer to fight the legal battle financially.
- Retroactive Settlements – The policy offers the benefit of the retroactive period on continuous renewal of insurance whereby the claims reported in subsequent renewals but pertaining to earlier periods after the first inception of the policy, also becomes payable.
- Flexible and Dynamic – The Lawyers Professional Liability Insurance can help a person as the policy has been specifically tailored and customized to suit the individual needs of the profession of the policy seeker, and also takes care of the mandatory legal obligations. In certain cases, having this insurance is necessary, if it involves a big client or a costly lawsuit.
- Wide Coverage – With this insurance, one can get him/herself protected from claims arising out of professional negligence, such as errors in litigation, failure to give accurate legal advice, failure to meet deadlines, failure to give accurate tax advice, public relations (PR) expenses, etc.
What Are The Exclusions Under Lawyer's Indemnity Insurance?
- Any criminal act or any act committed in violation of any law or ordinance will be excluded from the policy.
- If the services are rendered while under the influence of drugs, alcohol, intoxicants, or narcotics, the policy will not take any responsibility for that.
- Any third party public liability will not be covered by the policy.
- Any condition caused by or associated with AIDS will be excluded as well.
- If there is any claim rising out of all personal injuries such as libel, slander, false arrest, wrongful eviction, wrongful detention, defamation, etc., and resultant mental injury, anguish, or shock, the policy will not take care of that.
- If there is any infringement of plans, copyright, patent, trade name, trademark, or registered design, the claim will get rejected.
- Deliberate, willful, or intentional noncompliance with any statutory provision will be permanently deleted from the policy.
- Non-compliance with technical standards commonly observed in professional practice, laid down by law, or regulated by official bodies will also fall under the category of exclusions.
- If there is any kind of loss of a purely financial nature, such as loss of goodwill or loss of market, the company will not be liable to pay for the loss.
- Any dishonesty, fines, penalties, punitive or exemplary damages, fraudulent criminal or malicious acts, or omission will not be covered.
- Professional services rendered by the Insured prior to the Retroactive Date in the Schedule will also not be covered.
- If there is any injury to any person under the contract of employment or apprenticeship with the insured, their contractor(s) and/or Sub-Contractor(s) when a such injury arises out of the execution of such contract, the insurer will not be held responsible for that.
- Damages or losses arising out of war and nuclear perils will be excluded.
How Does Lawyers Insurance Help You?
For a covered professional liability claim, the insurance company will cover attorney fees, and court expenses. If any person losses the court case, the insurer will also pay the financial losses or damages which the court has decided he/she owes the client. In certain situations, the insurers also agree to pay a number of out-of-court settlements. In any case, this lawyer’s Insurance will help in covering the big-ticket costs of lawsuits.
How To Buying Process of Lawyers Insurance?
One can buy this policy either online or offline. To buy this policy offline, one has to visit one of the official branches of the company. Their customer executives will be always at service, and they are experienced and knowledgeable enough to guide the process thoroughly. On the other hand, if anyone wants to avail of the online buying procedure, then he/she needs to visit the official website of the chosen insurance company. After that, he/she needs to put certain details in the right place, and complete the process by doing the payment by choosing the most convenient method of payment available with the insurer. Or else, he/she can take the help of a licensed and registered insurance broker, agent, or third party website to complete the buying process. No matter what will be the buying method, do not forget to download or collect the receipt and the other documents after purchase. Keep it safe and secure for future reference and to avoid future complications.
Frequently Asked Questions
Here are some of the frequently asked questions that you must know.
Depending on the nature of the insurance company and the policy, it may or may not cover overseas claims. However, usually popular insurance companies offer overseas coverage.
The following additional covers are available with a Lawyers Insurance Policy at paying a little extra premium – Libel and slander, Loss of documents, Consultants, sub-contractors and agents, Joint venture liability, Estates and legal representatives, Outgoing Principals, Intellectual Property, Run-Off Cover for Insured Entity or Subsidiary.
As this insurance product is customizable to fit the necessities of the policy seeker, the premium amount depends on what types of coverage you are opting for. The more the covers are, the more money you have to pay to buy this policy.
In case the lawyer loses the trial, payments need to be made for the court judgment, this policy will provide financial support for that.
The following factors can influence the premium value of this insurance product:
- Claim history of your firm
- Risk management practices
- Areas of practice and expertise
- Disciplinary and regulatory history
- Ability to meet uncovered claims (claims for more than you’re insured for
If you cannot renew your Lawyers Insurance before it expires, your insurer will extend your policy for 90 days. This is to give you more time to arrange cover, but your firm will not be able to operate as usual for the whole of this period.
If you are related to a law firm or law consultancy, you can go for this policy. This policy is meant for the following people – advocates, lawyers, counsels, solicitors, financial accountants, law firms, legal advisors, etc.
Group policies are also available for lawyers’ professional indemnity cover. Members of the same profession will be covered. A discount on premium is also applicable as per the number of members added under the group policy.
There are a handful of insurance companies in India that offer lawyers insurance such as New India Assurance, HDFC Ergo, Bajaj Allianz, United India Insurance Company, Reliance General Insurance, and a few more.