Attorneys in South Carolina are frequently sued by disgruntled clients claiming legal malpractice. Whether or not the case is appropriate or justified, you can’t ignore it, and it will cost you both financially and professionally. 

The reputational and economic costs of a malpractice suit can be devastating. But with lawyers malpractice insurance in South Carolina, you can protect against the costs associated with malpractice claims aimed at you and your firm. 

Lawyers malpractice insurance is complicated. An independent insurance agent in South Carolina can help you understand the complexities, find the right insurance company, and structure your policy for your unique needs and exposures. 

What is Lawyers Malpractice Insurance?

South Carolina lawyers malpractice insurance, or lawyers professional liability insurance, protects you against claims of professional negligence. It provides attorneys with liability coverage for financial losses suffered by third parties arising from acts, errors, or omissions in providing legal services. 

Essentially, it protects you and your clients in the event you make a mistake in the services you provide. This can be in the form of providing faulty advice, making errors, or causing a client to lose money due to negligence or an act of omission. 

Simplistically, lawyers malpractice insurance covers the costs associated with your legal defense, as well as any judgments or settlements that you are ordered to pay if an unhappy client sues you. It’s important to understand how your policy is structured, what it covers, and when it pays claims. 

What Does Lawyers Malpractice Insurance Cover in South Carolina?

South Carolina lawyers malpractice insurance covers liability claims directly related to the provision of legal services and the resulting financial loss for a client or customer. 

Some examples of covered errors or omissions include:

• Missed filing deadlines
• Client perceives that the outcome was less than hoped for
• Errors in interpreting the law or applying a statute

If you’re sued for malpractice, your South Carolina lawyers malpractice policy might pay for things like:

• Damages (financial payouts that the insured attorney is legally obligated to pay as a result of any judgment, award, or settlement) 
• Legal fees, expenses, or other costs related to the claim
• Injunctive or declaratory relief
• Civil or criminal fines, sanctions, penalties or forfeitures
• Punitive damages
• Other form of non-monetary relief

Your policy will specify exactly what is covered and what expenses and situations are excluded from coverage.  

One of the most complicated areas of lawyers malpractice insurance is the determination of coverage based on when a claim is made. Unlike typical insurance policies, which pay only for incidents that occur while the policy is in force (e.g., your auto insurance policy only pays for accidents that occur during the policy period), most legal malpractice insurance policies are written on a “claims-made” basis. This means that coverage is determined based on the date a claim is made and reported, NOT the date on which the act, error, or omission occurred. 

It’s important to understand how a claims-made policy works and all of the additional conditions that you must meet in order to be covered throughout your career, after changing insurance companies or moving to a new firm, or embarking on a solo practice. 

An independent insurance agent in South Carolina can help you understand how your policy works and how it must be structured in order to make sure you are covered as your career evolves. 

What Does Lawyers Malpractice Insurance Not Cover in South Carolina?

While understanding what your legal malpractice insurance covers is extremely important, it’s also extremely important to understand what  your policy does not cover. 

Some of the common exclusions that you will find in South Carolina lawyers malpractice insurance include: 

• Claims arising out of dishonest, fraudulent, criminal, malicious, or deliberately wrongful acts, errors, or omissions
• Claims for bodily injury and property damage (these would be covered under the practice’s commercial general liability policy)
• Claims arising out of business that a lawyer conducts other other than the law practice, such as:
  • Businesses for which the lawyer serves as a director (directors and officers liability insurance covers such activities)
  • Business activities of an entity that a lawyer controls, operates, or manages as a fiduciary
  • Occasions where the lawyer serves as a public official, a fiduciary under ERISA, a broker, dealer, investment advisor, accountant, or a real estate broker
• Business disputes among lawyers who are in business together, or legal disputes between a lawyer and some other business associate 

Policies vary from carrier to carrier and specialty to specialty; there is definitely no one-size-fits-all legal malpractice policy in South Carolina. Some other coverage exclusions you might encounter include:

• Claims for mental anguish or emotional distress
• Claims for unlawful discrimination, such as discrimination on the basis of race, national origin, creed, religion, age, sex, or marital status

What Are the Benefits of Lawyers Malpractice Insurance in South Carolina?

Lawyers in South Carolina are not required by law to purchase legal malpractice insurance. And while some attorneys, especially new or solo practitioners, sometimes forego purchasing lawyers malpractice insurance, it’s important to understand the role it plays in protecting your practice and possibly saving you from financial ruin. What’s more, you have an ethical obligation to your clients and your staff and associates to protect everyone’s financial interests. 

Some of the benefits of purchasing South Carolina lawyers malpractice insurance include:

• Avoid the cost of defending claims
• Protect your personal assets in the event of a settlement or judgment
• Protect the public/clients
• Protect your staff and associates
• Get peace of mind
• Build client confidence/legitimize your practice
• Ethically and professionally appropriate
• Fulfill legal requirement (in some states)

Carrying lawyers malpractice insurance in South Carolina is likely the right thing to do for your practice. The costs of going without it could far outweigh the costs of your premium, and could even end your legal career if you’re faced with a malpractice claim. 

Can I Afford Lawyers Malpractice Insurance in South Carolina?

South Carolina lawyers malpractice insurance can be pricey, especially if you work for a small firm or on your own. The cost depends on several factors, including the insurance provider, your area of practice, the number of years you’ve been in practice, the size of your practice, and where your firm is located. 

Lawyers in what are considered to be “high-risk” specialties (those with higher rates of malpractice claims or greater exposure) will likely pay more for their South Carolina lawyers malpractice insurance than others. What’s more, a new attorney with minimal experience will likely pay more than an experienced attorney with decades of practice behind them. However, if you’ve got a poor disciplinary record or previous malpractice claims, expect to pay more. 

Your geographic location also may play a role in your lawyers malpractice insurance costs. If malpractice claims seem to be more prevalent in your South Carolina city, you’re going to pay more for your malpractice insurance. And keep in mind that smaller firms often pay more per insured person (covered attorney) than larger firms. 

But if you’re a newly admitted attorney or a small or solo practitioner, you can find opportunities to save. Some insurance companies offer discounts or price breaks specifically for those who otherwise might pay more. What’s more, your state bar association probably provides access to discounts on malpractice insurance. 

And remember, just as with other insurance policies, your policy specifics will play a huge role in the cost. The amount of coverage you need, your deductible, and the other coverage options you choose will drive your premiums up or down accordingly. 

Do I Need an Agent to Purchase Lawyer Malpractice Insurance in South Carolina?

A local independent insurance agent can be an invaluable resource for attorneys looking for South Carolina legal malpractice insurance. An independent insurance agent can offer you multiple policy options from different insurance companies, so you’ll have a variety of possibilities to compare and contrast. 

Your agent will guide you through the application process, too, making the process as easy and painless as possible. Ultimately, you need to find the right insurance company and coverage for your unique needs and exposures, and your independent agent will be there to guide you through the process and provide access to the companies that are best suited for you.