Joe Barnard, CPA

Top 5 Reasons Every Lawyer Should Have E&O Insurance

Errors and omissions (E&O) insurance policies cover professionals, including lawyers, for their losses or liabilities if they make a mistake or commit malpractice. Although it can be uncomfortable to think about needing this kind of protection, E&O insurance is a vital part of your overall professional plan.

Here’s why you should purchase coverage early and ensure that you maintain it through your career.

To Reduce Your Risk 

When you’re first starting your legal career, you’re going to make some mistakes. Hopefully, those learning experiences won’t cause you or your clients significant harm.

However, if your mistakes, errors in judgment, or decisions about how to best negotiate or litigate a client’s case cause your client to suffer loss, you risk being sued for malpractice or facing a complaint to the bar.

One of the lesser-known benefits offered by many E&O insurers is access to a veritable treasure trove of educational materials, forms, resources, and practice guides. Some even have mentor connection services, and many offer hotlines to help you decide how to deal with issues before they develop into claims or complaints. These resources can help you broaden your knowledge, become a better lawyer, and reduce your risk of making the kinds of errors and omissions that these policies cover.

To Hedge Your Bets 

Not all errors are preventable. Just because you can’t avoid them, however, doesn’t mean you aren’t legally accountable for them. For example, if your assistant is committing financial fraud by stealing client information, the clients may be able to claim that you are responsible for these actions through negligence, failure to supervise, or some other basis and demand compensation.

Further, not all bar complaints or lawsuits are based on actual errors or omissions; any unhappy client can file a complaint if your services did not lead to the results he or she wanted or expected.

While such a complaint may not ultimately be sustained, E&O insurance will defend you and compensate you for your losses and expenses along the way. This coverage protects you against the kind of situations that are impossible for you to avoid but can expose you to liability.

To Protect Your Assets

Lawsuits are expensive and only getting more so. Without even thinking about the cost of a judgment or settlement, the costs of defense alone are staggering. Attorneys’ fees, discovery costs, expert fees, and more can easily soar into the thousands and tens of thousands as a case drags on.

If you’re a small business or a sole practitioner, this can bankrupt your business. Even larger companies can feel a lasting effect on their bottom line—to say nothing of the stress and disruption in the workplace. A significant settlement or judgment against you can threaten your personal financial assets as well. Without insurance, you could lose everything.

To Protect Your Investment

You invested a lot of time and money into your legal education and professional development. An E&O policy means that you’ll be backed up by specialized legal malpractice attorneys who have the experience and the knowledge to protect your professional reputation in the event you face a bar complaint or lawsuit.

Trying to defend yourself is “penny wise and pound foolish,” risking enormous losses to save the cost of a premium. In fact, costs are lowest for new attorneys, so it’s affordable to protect your practice from the very beginning. Investing in an E&O policy at the start of your career means that you will be covered for the scope of your professional life.

Peace of Mind

Having professional liability experts on your side lets you focus on serving your clients, knowing that if something happens, you’ll be in good hands. While no one ever wants to hear that a client is lodging a complaint or filing a lawsuit, having E&O insurance means you won’t have to face it alone. 

Skilled defense attorneys will help you mount an effective, appropriate defense, and your policy will pay defense costs as well as any settlement or judgment. You may not be able to completely eliminate the risk, but E&O coverage can help you sleep easier.

ProDefender can help get you covered with lawyer's professional liability insurance. Get in touch with us to learn more about our affordable policies and valuable professional resources.


Lawyers Professional Liability 


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