Professional Liability Insurance Policies
Washington lawyers are not required to have professional liability insurance coverage. However, they are required to report to the Washington State Bar Association, on a yearly basis, whether they have coverage. They are not required to report the following:
- Who their insurer is, if they have malpractice insurance coverage.
- The limits of their policy.
- The amount of any deductible that the lawyer must pay before the insurance company is obligated to pay a claim.
- Any limitations on or exemptions from coverage. For example, most legal malpractice insurance policies do not cover claims against a lawyer that arise out of illegal conduct by the lawyer.
Not all lawyers maintain professional liability insurance. Some lawyers may make a responsible decision not to maintain insurance because the lawyer is an in-house or government lawyer, or because the lawyer may choose to be financially responsible (self-insured).
The Washington State Bar Association does not independently verify the insurance information provided by lawyers. There is no guarantee that a lawyer has maintained insurance coverage after the report date or will continue to maintain insurance coverage in the future. There is also no guarantee that a lawyer has adequate insurance limits to cover all potential claims or that a particular claim will be covered by the policy. Note that it is also possible that the information displayed was erroneously reported or incorrectly entered in the State Bar's database.
The following is a list of questions that a prospective client might ask before entering into a lawyer-client relationship with a particular lawyer:
- Do you presently maintain professional liability insurance coverage?
- What is the name of your insurer?
- What are the limits of your coverage? Have any of those limits been used in the payment of other claims?
- What is the deductible under your policy?
- Does your policy cover the type of work you are doing for me?
- What is the term of your current coverage?
- Will you advise me if you discontinue your coverage or change your limits?
- Could you provide me with a Certificate of Insurance (evidence from an insurance company that the lawyer is insured)?
- If you do not maintain professional liability insurance, why have you made that decision?
Professional liability insurance policies provide insurance coverage for some but not all professional liability (malpractice) claims made against a lawyer. Most professional liability policies are written on a "claims-made" basis. This is different from the usual home-owners or automobile insurance policy. This means that the insurance company providing the insurance has agreed to cover claims that are made against the lawyer during the term of the policy. In other words, the policy that applies to a particular claim is the policy that is in effect at the time the claim is presented to the insurance company with a demand for payment - not the policy in effect when the lawyer's alleged negligence or mistake took place. Malpractice insurance policies typically limit the amount that the insurance company can be required to pay on each claim and the total amount that the insurance company can be required to pay on all claims made against the lawyer during the term (or effective period) of the policy. The maximum amount of coverage provided by a malpractice insurance policy is called the "limits" of the policy.
Frequently Asked Questions about Professional Liability Insurance
Why am I required to disclose whether I have Professional Liability Insurance?
Washington Supreme Court Admission and Practice Rule 26 provides that every active lawyer of the Washington State Bar Association is required to disclose annually whether the lawyer maintains professional liability insurance.
What is the purpose of required insurance disclosure?
The purpose of the insurance disclosure rule is client protection and to permit clients to make informed decisions when deciding whether to retain a particular legal professional. Under the Washington Rules of Professional Conduct, one of the basic principles of the lawyer-client relationship is that the lawyer will give the client sufficient information regarding material facts to allow the client to make an informed decision in matters relating to the representation. See, e.g., RPC 1.4; 1.7. Whether a lawyer maintains professional liability insurance may be an important piece of information for some persons in considering whether to hire a legal professional, and it should be readily available to a client or prospective client.
What does the rule require?
APR 26 requires that each active status lawyer certify annually on a form approved by the Board of Governors (a) whether the lawyer is in private practice; (b) if so, whether the lawyer maintains professional liability insurance; (c) whether the lawyer intends to continue to maintain insurance; and (d) whether the lawyer is a full-time government lawyer or house counsel and does not represent clients outside that capacity. The rule also requires notification to the WSBA within 30 days if the lawyer in private practice ceases to be insured. The rule does not require lawyers to have professional liability insurance.
Is failure to disclose a disciplinary violation?
Failure to comply with the disclosure requirement will result in administrative suspension from practice until the information is disclosed, in the same way that lawyers may be suspended for failure to comply with the continuing legal education reporting requirements, but it is not a disciplinary violation.
What is done with this information?
This insurance information is available to clients or prospective clients on the lawyer directory on the WSBA website or by contacting the WSBA. In practice, the availability of this information will operate similarly to the contractor insurance and bonding information available to the public through the Department of Labor and Industries by contacting the Department or searching the Department's website.
Where can I find information on purchasing legal malpractice insurance?
The WSBA has endorsed professional liability insurance company, ALPS, which can provide information about coverage they offer. In addition, the ABA Standing Committee on Lawyers' Professional Liability has a very helpful webpage with links to insurance resources for lawyers.
How should I fill out the Professional Liability Insurance Disclosure?
Mark the one box that fits your situation. If you represent clients in any capacity (even if it is pro bono or as a contract attorney), you should find out whether the organization for which you are providing services maintains and intends to maintain professional liability insurance and mark the appropriate box.
How should I notify the WSBA if my coverage lapses, is no longer in effect or terminates for any reason?
APR 26 requires written notification within 30 days if your coverage lapses, is no longer in effect or terminates for any reason. After you have filed your Professional Liability Insurance Disclosure during the license renewal process, you may make changes to it by logging into www.mywsba.org and clicking the Edit Liability Insurance Info link. Or, you may send an email to email@example.com.