Talk to a specialized agent before entering new areas of practice and know which areas are experiencing an increase in claims.
Insurers of Legal Malpractice often will not consider firms that operate in certain areas known to be high risk for severity of claims or frequency of claims. It is interesting that the types of law considered to have a severity problem often are not prone to frequent claims and vice versa. The ‘Area of Practice’ grid on an application for Legal Malpractice can vary by company and can be confusing. Two pointers: answer the grid based on the type of legal work rather than the industry of the client; and look closely at the question prompting the grid it may be based on hours worked or revenue. Obviously hours worked and revenue can vary drastically especially for plaintiffs firms.
The ABA’s most recent study showed that for the first time Plaintiff is not the leading area for claims frequency. That honor now belongs to Real Estate.
Which Areas of Practice are of concern to Malpractice Insurers?
Estate Planning-particularly large estates
Link to press release regarding the ABA claims study: http://www.abanow.org/2012/09/real-estate-matters-top-list-of-legal-malpractice-claims-in-new-aba-survey/