Do You Need Malpractice Insurance?
What are some typical concerns when you are considering getting malpractice insurance?
Common concerns are cost, not doing complex work that you feel would require malpractice insurance, and not having assets to protect.
Consider that the duty of professionalism requires that an attorney whose error or omission has truly “cost” a client make restitution; it is good for your peace of mind, thus for your best performance, and that mistakes can happen.
One state requires malpractice insurance (Oregon).
In Wisconsin, there is no requirement that a lawyer carry malpractice insurance. However, according to Wisconsin Supreme Court Rules of Professional Conduct for 10 Attorneys (SCR 20:5.7), a lawyer or law firm that is organized as a limited liability organization must file as a limited liability company with the State Bar of Wisconsin and that registration must include a certificate of insurance issued by an insurance carrier certifying that it has issued the firm a professional liability policy. The rule also requires insurance coverage minimums depending on the size of the firm.
The Cost at WILMIC, for newly admitted lawyers just starting out, malpractice insurance can be more affordable than you might think. The average premium for a one-year policy from WILMIC for a first-year lawyer will be in the range of $250 – $600, depending on coverage limits and deductible selected, areas of practice, full or part-time work, and how
many lawyers are in the firm.
For example – for a solo practitioner in his/her first year of practice, choosing $100,000 per claim and $300,000 aggregate coverage limits and a $1,500 deductible, working full-time, the premium will be around $400. If part-time, it would be closer to around $250.
This is far below the full base rate price. It is roughly 70% lower than the full base rate for a lawyer practicing full-time with five years in practice.
Why is it a lot less expensive for new lawyers? It is less expensive because there is no previous exposure, not likely to start out doing complex and potentially expensive legal work (yet), and it needs to be affordable for new lawyers.
This premium would increase a little bit each year for the first six years of your practice to reflect increased exposure for each year you practice, then level off after reaching the full base rate in your seventh year.