You’ve made it your mission to offer the best advice services you can in your industry. You do your research thoroughly, double-check your accounts and are in step with the client at every level of the process.
You have trained your staff to work in this manner too and to ask each other for help if they should hit a wall. As a small business owner, you’ve done everything you can to ready your company for working with the public. But no one is perfect. Mistakes, even the most miniscule, can cost a small business a hefty sum if it doesn’t shut it down completely.
Over 100 million lawsuits are filed every year in the U.S. Sixty percent of 20 million civilian cases center around contract disputes alone, with liability and tort cases making up another 11 percent.
If something happened to an employee or client on your watch and you were taken to court for it, do you have the financial backing to cover litigation costs and business interruption? If you can’t quickly come to an answer, then you probably don’t. If you own a small private practice, you had better get professional liability insurance ASAP, it could save your business from a sue happy, disgruntled and crazy client.
Private Law Firm
Lawyers getting sued for malpractice have spiked in the last few years, with The Hartford reporting five major causes for the sudden turn on private practice:
- Professional Misconduct: Lawyers are supervised for the breach of ethical behavior by their respective state supreme court and state bar association. If it is determined that legal counsel has a conflict of interest in representing a client in the courtroom or has broken with their fiduciary duty, the client has grounds to sue the lawyer for breach of conduct. The lawyer will face a professional reprimand and can at the worst be disbarred.
- Administrative Blunders: Losing paperwork, misfiling or misreading deadlines can cause you to miss important filing dates, impacting a case negatively. This can be interpreted as carelessness by your firm, resulting in a claim of negligence.
- Missed Deadline Filings: In 2012, a California woman sued her personal-injury lawyer after it was learned that he had not investigated a legal claim against the state, which had improperly maintained the highway she had been driving along when she was involved in a life-changing auto accident. The highway was flooded, and the accident left her paralyzed. In this instance the state could have potentially been held liable for the accident, but because the woman’s lawyer, Larry H. Parker, failed to make an investigation in time, he missed the deadline to file a claim against the state. Missed filings can immediately throw out a case. If your client believes that you did not do everything you could, they will take you to court.
- Negligence: If a client does not win their case when they had every reason to believe they would, they’re going to want to blame someone, and that someone is their attorney. They will hire another lawyer to examine the case and will report you or your firm to the state bar association. If it’s determined that you mishandled the case through fraternization, missed deadlines or failure to meet with the client you could lose your reputation and your private law firm, even if you win the case in which you’re the one being held for damages.
- Confidentiality Breach: Lawyers face each other many times in court and are often part of the same social circles. If your client has reason to believe you have been fraternizing with the enemy or have condemned them for guilt in an way, as was the case with lawyers Alan Cohen and Jeff Witt, they can take you to court.
In all of the above situations, professional liability insurance will provide costs and restitution fees for your legal defense. Your firm won’t have to pay to represent itself, and you can focus on your work, while your insurance company works for you.
There are many risks that come with owning a business, don’t make not having business insurance one of them.