Pro bono work is an important, and often fulfilling, aspect of an attorney’s practice. For those in financial hardship, the pro bono attorney may spell the difference between hope and disaster. However, some attorneys may hesitate to take on a pro bono assignment because they are wary of the potential for malpractice exposure. Indeed, one report found about half of all attorneys surveyed identified lack of malpractice coverage as a factor discouraging participation. This and other concerns are warranted. While pro bono work is to be encouraged in the appropriate circumstance, there are risk factors to consider before doing so. Show Don’t dabble. Although some encourage pro bono assignments as an opportunity to expand horizons, this may open the door to attorneys acting outside of their comfort zone and putting themselves and the pro bono client at risk. Just as a lawyer should never dabble in an unfamiliar practice area with a paying client, so too should it never happen with a pro bono client. Seek guidance. Get educated or the attorney’s good intentions may turn to malpractice. In some cases this may mean that there will be times where the potential pro bono client will be best served by saying “no.” If you are not up to the task, take a pass and look to provide assistance to someone who needs help in the areas that you are most comfortable. There are also insurance considerations. Some attorneys may reject pro bono assignments fearing that their malpractice insurance will not apply. This is a legitimate concern that may come down to the specific policy in play. Most attorneys are covered for work performed within the scope of their employment with the insured (usually their law firm) on behalf of clients. If the pro bono client is a client of the firm, and documented as such, there shouldn’t be an issue. When in doubt, check with your broker befor accepting an assignment. Some organized pro bono programs attempt to “match” attorneys with assignments those attorneys are competent to handle, and may also limit the scope of representation, offer mentoring and skills training, and even extend malpractice coverage to volunteer attorneys to the extent tort reform legislation does not already provide a shield. Coverage for pro bono work often depends on your jurisdiction. In any case, consider the fact that malpractice suits against volunteer attorneys are reportedly uncommon, judgments rarer, and significant financial consequences even more atypical. With that in mind, consider the following precautions:
What is LPL? Do I need liability coverage? I am volunteering through a legal services provider or a bar association, do I need my own coverage? I already have a policy, am I covered? For policies issued by Lawyers Mutual, claims arising from pro bono activities are covered just as a claim for a paying client would be, subject to the terms and conditions of your policy. Are there any special policy
benefits to consider? For policies issued by Lawyers Mutual after August 1, 2015, there is a limited waiver of deductible up to $10,000 for claims expenses on pro bono matters handled through many legal service providers. I do not have a policy, what are my options? Next, check with your employer to see if it has a policy that may cover your pro bono work.
What is Claims-Made Coverage? Under claims-made coverage, it is the policy in effect at the time the claim is made against the insured – not the time the act/omission occurs – that responds to the claim. There is also an additional condition with this type of coverage — the alleged act/error/omission must have occurred within the attorney’s “prior acts” or “retroactive” period. What are “Prior Acts”? The prior acts or retroactive period is the time between that date and the current date. If there is a gap in coverage, this period may be lost since claims-made coverage relies on maintaining continuous insurance coverage. How much would coverage cost me? Your employer may have the option of adding an endorsement to its existing liability policies for a small additional fee. Have your employer check with the company’s agent to determine availability and pricing. If your employer is interested in obtaining stand-alone coverage for the attorneys at the company, then an Employed Lawyer policy would be the appropriate way to go. Generally, costs would be below $2,000 per year for most employers for solely pro bono work, but the pricing varies by carrier and program. Why should I pay for insurance to work for free? Additionally, many carriers offer other benefits such as free advice, free or reduced cost Continuing Legal Education, reference materials, library resources, and policyholder dividends that can reduce the net impact of the premium on your overall budget. If I get my own policy, what happens when I no longer need it? Tail Coverage, which has the formal name “Extended Reporting Endorsement,” or “ERE” for short, is the solution. As the name implies, it is an endorsement that attaches to the last in-force policy and extends the time period for reporting a claim under that policy for an additional period of years. It has an additional cost, but it is usually a one-time payment even if you choose an option that lasts for many years. This will not cover anything that happens after the ERE goes into effect, it only extends the time to report claims that otherwise would have been covered by the last policy. Lawyers Mutual offers two options: 4-years, which corresponds to the Statute of Repose for legal malpractice in North Carolina; and an Unlimited-time option. Where can I find more information on professional liability insurance?
Special thanks to Lawyers Mutual Insurance Company for helping prepare this information. Does NC require malpractice insurance?While North Carolina law does not require medical professionals to obtain medical malpractice insurance coverage, you may not be able to practice in some facilities if you do not carry coverage.
Is legal malpractice insurance required in NY?For example, New York does not require that a lawyer carry malpractice insurance. Oregon is the only state in the US to require legal malpractice coverage. Many jurisdictions in other countries require a lawyer to have an insurance policy before they are allowed to practice.
Is legal malpractice insurance required in California?No mandatory insurance requirement (except for limited liability partnerships or law corporations, as presently required by statute).
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