The Average Cost of Legal Malpractice Insurance

By Maggie Gebremichael

Malpractice refers to improper actions by a person that cause damages or injuries. Professionals such as lawyers, dentists and doctors carry malpractice insurance based on their occupation and thus, potential exposure to litigation. The cost of malpractice insurance has risen dramatically because of the increasing realization that all lawyers will be sued at least once during their careers.


The cost of legal malpractice insurance varies just like automobile insurance. There are different insurance companies by state that offer various rates and deductibles. Malpractice insurance typically pays for an attorney's defense (even if he did nothing wrong) plus any monetary fines. For example, if a client is awarded $50,000 because of his attorney's mistake (such as failure to know the right law or a missed deadline), the malpractice insurance carrier will pay the client.


The average cost for one lawyer can range from $5,000 to $8,000 per year. However, there are several factors that impact the cost, including a lawyer's specialty. Divorce, real estate and personal-injury lawyers (car accidents, slips and falls) usually have higher rates.


Lawyers with several complaints and lawsuits filed against them will pay higher malpractice premiums than lawyers who have never been sued by their clients. Malpractice coverage also is cheaper if purchased for longer periods of time.


While most local bar associations offer discounted insurance rates for members, legal malpractice rates depend on an attorney's geographic location. An attorney in Los Angeles likely will pay more than an attorney in Tulsa, Oklahoma. The overall state's litigation environment also impacts the cost of malpractice insurance.

Firm size

Another factor for legal malpractice rates is the firm size. If an attorney works at a large firm with several other attorneys, the insurance rates often are cheaper per attorney than coverage paid by solo practitioners (one attorney firm) and small to mid-size firms.