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New Liability Insurance Disclosure Rule Exceeds ABA Standards

Addition to Rules of Professional Conduct requires that attorneys without liability insurance tell new clients that they aren't covered.

(Lemoyne, Pa.) - The Pennsylvania Supreme Court Disciplinary Board announces an amendment to the Pennsylvania Rules of Professional Conduct for attorneys requiring lawyers to inform new clients in writing if the lawyer does not have professional liability insurance.

Now in effect, rule 1.4 (c) says, "A lawyer in private practice shall inform a new client in writing if the lawyer does not have professional liability insurance of at least $100,000 per occurrence and $300,000 in the aggregate per year, subject to commercially reasonable deductibles, retention or co-insurance, and shall inform existing clients in writing at any time the lawyer's professional liability insurance drops below either of those amounts or the lawyer's professional liability insurance is terminated. A lawyer shall maintain a record of these disclosures for six years after the termination of the representation of a client."

Liability insurance helps protect clients from financial loss due to attorney malpractice. Many in the legal community consider it professional and responsible to have liability insurance, which protects an attorney's clients.

"We believe that communication between attorneys and their clients is vital to the continued growth of the Pennsylvania legal profession," Gary Gentile, chair of the Disciplinary Board, said. "The rule exceeds the American Bar Association's model rule and puts Pennsylvania ahead of the curve when it comes to attorney-client relationships."

This rule is based on the ABA's Model Rule on Financial Disclosure. According to ABA statistics, Pennsylvania is one of five states (Alaska, New Hampshire, Ohio and South Dakota) to require disclosure directly to the client. There are 14 other states that require attorneys to disclose their lack of malpractice insurance on annual registration statements including Arizona, Delaware, Idaho, Illinois, Kansas, Massachusetts, Michigan, Nebraska, Nevada, New Mexico, North Carolina, Virginia, and West Virginia.

According to Gentile, a common misconception is that the new rule makes liability insurance mandatory. "This new rule does not require Pennsylvania attorneys to have liability insurance; that is still a decision for the individual attorneys. The new rule simply requires that they inform new clients if they don't have insurance."

A complete copy of the Pennsylvania Rules of Professional Conduct can be accessed on the Disciplinary Board's web site at www.padb.us.

The Disciplinary Board is an independent agency that consists of 16 members, 14 attorneys and two non-lawyers from across the state. It assists the Supreme Court in carrying out its exclusive jurisdiction over the licensing and discipline of attorneys in Pennsylvania. The members meet regularly to decide cases, policies and board administrative matters.

The Disciplinary Board's goals are to protect the general public, maintain a high standard of integrity in the legal profession, and safeguard the reputation of the courts of Pennsylvania. The Disciplinary Board was created by the Supreme Court of Pennsylvania to review conduct and assure compliance by all attorneys to the Pennsylvania Rules of Professional Conduct. For more information about the Disciplinary Board please visit www.padb.us For information on this press release contact Nathan Pigott at (717) 975-2148 or npigott@hersheyphilbin.com.