This is one of the most frequently asked questions at TLIE. If you had a crystal ball and could tell us what legal malpractice claims you will have, we could give you a perfect answer. Since that is unlikely, here are some factors we suggest lawyers consider when deciding on appropriate limits.

Lawyer Referral Service Requirements. A number of lawyer referral services require certain limits. Check with those in your area to find out their requirements.

Client Requirements. Some clients may require certain limits. We understand that some insurance companies, title companies and banks require certain limits before hiring counsel.

The Nature of Your Work. Many lawyers consider it a matter of professionalism to protect clients against honest mistakes. Consider the likely impact of a serious error in the services you ordinarily provide.

Defense costs. Remember that the insurance pays for defense as well as a settlement. At TLIE, we have found that a little more than one-third of our payments have been for defense costs. Ideally, your limits should cover both defense costs and possible judgments and settlements. A low limit may force consideration of an early settlement.

Your Assets. If you have significant assets that could be attached, the assets you have may affect the amount of insurance you choose to carry.

Price. You may not be able to afford the ultimate protection you’d like to have. If so, consider carrying a lower limit or higher deductible.

Ultimately, the right level of insurance should help you sleep at night. You will feel like you’ve spent a reasonable amount to protect yourself and your clients.