If you practice as a shareholder of a professional law corporation, a partner in a firm organized as a Limited Liability Partnership ("LLP"), or as a Registered Foreign Legal Consultant, statutes and The State Bar rules require you to carry malpractice insurance or establish other financial responsibility arrangements. In addition to statutory and State Bar requirements, some clients may require you to carry and furnish proof of coverage as a condition of your engagement.
Current statistics show that in any given year, a minimum of five to six insured lawyers out of every 100 in private practice will experience a malpractice claim. Statistically, this means a firm of 20 lawyers could be the recipient of a claim every year.
Since the exposure to legal malpractice is greater now than ever before, it is a prudent part of law office management to establish meaningful loss prevention practices, including the purchase of proper lawyers professional liability insurance coverage.
According to surveys conducted on behalf of The State Bar, over 90 percent of California attorneys in private practice are covered by malpractice insurance.
Mandatory Disclosure Rule - Rules of Professional Conduct: Rule 3-410 Disclosure of Professional Liability Insurance requires a lawyer to disclose to a client in writing if they do not have professional liability insurance if they anticipate working more than 4 hours for the client.