Factors Affecting Premiums
A lawyer can deal with a lawsuit. However, his client may not be satisfied with his actions during court proceedings. Therefore, the client may approach another attorney and sue his solicitor for the error or omission made by him during the proceeding in court. Moreover, dealing with multiple proceedings at a time is difficult.
Hence, a lawyer may also need an attorney to argue on his behalf and settle the dispute in court. In these circumstances, professional indemnity insurance for a lawyer provides legal aid to an attorney. Hence a professional lawyer should buy liability insurance.
Type of Cases
The type of cases that an attorney handles is a crucial factor in determining professional indemnity insurance premium. For example, if a solicitor deals in criminal cases, such as murder, abduction, etc., he may require to pay more premiums in order to cover his liability. In addition, a client dissatisfied with the wording, orders, decree or judgment of a court may present an appeal before a court against his attorney.
If the attorney is found responsible for endorsing a capital or other wrongful punishment to an innocent, he may have to incur a significant sum in order to settle the claim. Therefore, the premium charges may increase under such circumstances.
However, if a lawyer generally deals in civil cases, he may have to allocate a nominal premium charge.
The coverage limit is another factor affecting lawyer’s professional indemnity insurance premiums. At the time of buying the indemnity insurance, a solicitor is offered different types of coverages at different prices. The coverage limit confers the maximum and minimum amount an attorney is required to allocate in order to indemnify himself against his liability.
Hence, it is vital to choose the safest coverage limit since a liability may arise in this profession. However, if the lawyer does not deal with high-profile cases, he does not require purchasing expensive policies.
History of Cases
The insurance company interprets the history of cases a lawyer has dealt with during his practicing career. For example, if the company found him dealing with complex cases, the premium might be increased. Therefore, the history of cases is a crucial factor affecting lawyer’s professional indemnity insurance premiums.
Number of Employees
A law firm hires more employees or associates in comparison to a law chamber. Therefore, the premium for a lawyer's professional insurance may increase in the case of a law firm. The more number of employees are susceptible to making errors, the higher the premium amount of the insurance policy would be. However, when it comes to the law chamber, the premium is likely to be lower since it only hires two or three associates.
Previous claims are essential to consider while granting liability insurance to attorneys. If no action arises in the last insurance, the insurer may lower the premium price. However, if an attorney is prone to risk, the premium price is likely to increase.
An attorney may need some additional coverage in the existing insurance. Hence, the premium price is likely to increase for granting additional coverage to a lawyer.
A lawyer is susceptible to risk due to his profession. Hence, he must purchase indemnity insurance after determining the factors affecting lawyer’s professional indemnity insurance premiums.