Freelance Attorney Work: Is Malpractice Insurance Required?
In Minnesota, attorneys are not legally or ethically required to carry malpractice (professional liability) insurance. But the obvious question is not one of mandatory requirement, but rather a question of realistic necessity. Do freelance attorneys—who work on specific projects for hiring attorneys—need to carry their own separate malpractice insurance policy? With all of the other expenses associated with running a freelance practice, malpractice insurance seems like just another drain on financial resources. However, unlike buying a faster scanner or subscribing to more legal publications, acquiring malpractice insurance deserves serious consideration at the top of a freelance attorney’s priority list.
Best practice is for a freelance attorney to carry his or her own malpractice insurance policy. Although a freelance attorney should verify that the hiring attorney carries current and sufficient malpractice insurance to cover the project at hand, there exists the possibility of an indemnification claim by the hiring attorney’s insurer if a malpractice claim is filed. Whether or not the freelance attorney will be held liable is a separate issue, but handling the cost of defending against the malpractice claim is not something any freelance attorney should risk. In addition, carrying a malpractice insurance policy increases the reputability of a freelance attorney’s practice, showing potential clients (hiring attorneys) that the freelance attorney is a professional ready to do business the right way.
With freelance work being a relatively new practice area, the availability and coverage of malpractice insurance for freelance attorneys varies. However, most people are surprised by the relative affordability of a policy. Best advice is to contact several insurers to discuss policy specifics and get quotes. Insurers need to have a clear understanding of the freelance work being done, including practice area(s) and number of billable hours. The American Bar Association maintains a state-by-state directory of malpractice insurance providers. Ultimately, getting a malpractice insurance policy makes good business sense for any freelance attorney with his or her own practice.
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My advice is, don’t go bare. Professional liability insurance may not be required, but it makes sense–and like every other kind of insurance, it’s cheaper to buy it early, before you need it. The alternative is to ask to be added to the hiring attorney’s policy, which some firms will do upon request; but freelancers should never assume they will be covered by someone else’s policy without a specific agreement to that effect. It’s also a good idea to include any agreements about indemnification in the written contract.