Professional liability insurance—sometimes called malpractice insurance or errors and omissions insurance—is insurance that may be purchased by attorneys and law firms to pay the costs of defending legal malpractice claims, and the costs of settling such claims or paying the judgment awarded to a plaintiff on such a claim. Most states do not require attorneys to purchase professional liability insurance, but some states require attorneys who do not carry professional liability insurance to provide notice to their clients of that fact. Some states require attorneys to have their clients sign a written disclosure that the attorney does not have professional liability insurance.
In Arizona, attorneys are not mandated by state law to carry professional liability insurance, commonly known as malpractice insurance or errors and omissions insurance. However, the State Bar of Arizona encourages attorneys to maintain such insurance to protect against the financial risks associated with legal malpractice claims. While there is no statutory requirement for attorneys to inform their clients of their insurance status, the ethical rules set by the Arizona Supreme Court require attorneys who do not have professional liability insurance to disclose this fact in writing to their clients at the time they are hired. This disclosure must be acknowledged by the client, ensuring that clients are aware of the potential risks involved in hiring an attorney without malpractice insurance.