When your law practice is dependent on technology to operate, you need to carefully select a malpractice insurance policy that provides adequate coverage. This is even more important if you will be delivering legal services online to clients.
Right now, most malpractice insurance providers are treating virtual law practice the same as traditional law practice. It is up to the virtual lawyer to make sure the policy is going to adequately cover the firm’s risk. In some cases, the technology your firm is using may minimize malpractice risks and may provide better protection than traditional paper-driven methods. You may be able to explain this benefit of using technology in law practice management to a prospective insurance carrier and see if it might result in a discounted insurance premium. However, the most likely scenario when shopping for a malpractice insurance policy for a virtual law firm is that the software and/or hardware that you depend on may not be covered in the standard policies provided by malpractice insurance carriers.
In order to get the best coverage for your tech-driving law practice, here is a list of steps to cover when shopping for a policy:
- Educate: When discussing coverage with the carrier, explain any malpractice checks built into the technology that you use and explain how it minimizes risk. Maybe hold a web conference and walk them through the technology itself and show them your online engagement agreement, how you use encryption, and automated processes to ensure that you are ethically practicing law online. They may be interested in seeing if the technology provides jurisdiction checks that assist you in avoiding unauthorized practice of law (UPL), conflict of interest checks or calendaring or ticker systems to help avoid missing critical deadlines. Check out this Risk Management Handout on virtual law practice from Lawyer’s Mutual.
- Check for exclusions. Make sure the policy does not contain a provision that would exclude aspects of your technology used for practicing law online.
- Correctly evaluate your risk. Depending on the structure of your virtual law practice, you may be dealing with a larger quantity of smaller client matters rather than a smaller number of cases that involve larger risk. Accordingly, you need to evaluate the potential total loss from a claim. This might not be as large if you are working with a larger quantity of smaller client matters.
- Cover all necessary parties. If you are working with virtual paralegals or virtual attorneys who are all working remotely, make sure they are covered in the policy.This will ensure that the firm itself or all the members will not be held responsible for the acts or omissions of a single individual working in your firm. This may be a challenge to find a malpractice carrier that will cover a multi-jurisdictional, multi-practitioner, virtual law practice. Expect that the cost may be significantly greater than what would be provided to a traditional multi-member firm.
- Get insurance for your hardware. You may be depending on cloud computing to operate your practice, but you need hardware to access it. You may also have in-house backup systems that depend on your computer or an external hard drive.
- Don’t be surprised if an insurance carrier won’t cover loss related to electronic data. One significant area of potential loss for a virtual lawyer is the risk of a security breach from a malicious hacker or online identity theft. Many insurance policies will not cover these which could leave a big gap in coverage. Find out if additional coverage may be purchased that would cover this loss.