One way that California attorneys can protect themselves in the event of a legal malpractice suit against them is to take out a malpractice insurance policy on their firms. This way, if a former client ever sues, the firm may not have to pay out of its own pocket to pay a settlement or judgment.
Ideally, legal malpractice insurance is good for the plaintiff as well. Often, the negligent attorney who harmed the plaintiff has limited funds, so it could be years before he or she is able to pay the compensation — if he or she ever does. But if he or she has malpractice insurance, the insurance company can pay.
In reality, there is no guarantee that the attorney or firm is insured. Only about 60 percent of attorneys have malpractice coverage. Those who do may not have a policy that covers certain types of legal malpractice, such as fraud, theft or overseas activities.
One way that people can protect themselves is to ask an attorney if they have malpractice insurance before hiring him or her. California law requires lawyers to disclose whether or not they are insured. The answer to this question should help inform your decision whether or not to have the attorney take on your case or legal matter, especially if a lot of money is at stake.
Of course, insurance companies want to pay as few claims as possible. When you file a malpractice claim against an insured attorney, the insurance company will hire a law firm to defend its client. Thus, you will probably need legal representation of your own to help you pursue your claim.