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 Pennsylvania, attorneys are not mandated by state law to carry professional liability insurance, also known as malpractice insurance or errors and omissions insurance. However, the Pennsylvania Rules of Professional Conduct require attorneys who do not maintain such insurance to inform their clients of this lack of coverage. Specifically, Rule 1.4(c) of the Pennsylvania Rules of Professional Conduct states that a lawyer must inform a new client in writing at the commencement of a representation if the lawyer does not have professional liability insurance of at least $100,000 per occurrence and $300,000 in the aggregate per year, and must inform existing clients in writing if the lawyer's professional liability insurance drops below these amounts or is terminated. This disclosure helps clients make informed decisions about their legal representation. Failure to provide such notice can result in disciplinary action against the attorney.