GuideToPurchasingLawyer’s-VirginiaState.docVIP

A GUIDE TO PURCHASING LAWYER’S PROFESSIONAL LIABILITY INSURANCE IN VIRGINIA Presented By The Virginia State Bars Special Committee on Lawyer Malpractice Insurance August 2008 The Need For Professional Liability Insurance Malpractice insurance is essential to: Reduce the chance that a claim will result in a severe financial hardship; Provide the insured lawyer with objective advice when faced with a malpractice claim; Assure a prompt and reasonable settlement or dismissal of a claim; Provide access to valuable risk management resources; Save time and reduce the frustration of dealing with spurious claims; Provide protection for a lawyer’s reputation; and Ultimately, protect the client’s interests in the face of a credible claim. Although the debate over mandatory insurance continues, as of today lawyers in Virginia are not required to maintain malpractice coverage. However, many of the Commonwealths citizens assume to their detriment that they will have access to compensation in the event their lawyer commits an error. To our credit as a profession, most Virginia lawyers in private practice recognize malpractice litigation as an ever present risk for todays professional and protect themselves, as well as their clients, accordingly. To help our members meet that threat head on, the Virginia State Bar supports the work of this committee and works closely with the Lawyers Liability Protection Society (ALPS). ALPS is the endorsed malpractice carrier of the Virginia State Bar (“VSB”) and it provided this committee with concrete data to help understand the risks and the solutions available in today’s market place. For example, more than 4% of lawyers insured by ALPS submitted potential malpractice claims in 2007. ALPS’s clients represent a cross-section of the lawyers in Virginia, so we can conclude that, on average, a firm of 20 lawyers will likely have a malpractice claim every year of its existence.