Umbrella Coverage vs. Going Bare
![handle is hein.journals/abaj84 and id is 956 raw text is: SOLO NETWORK
Umbrella Coverage vs. Going 'Bare'
Citing costs, some solos maximize exposure by forgoing malpractice insurance
BY JILL SCHACHNER CHANEN
Cynthia Stump Swanson found
out the value of malpractice insur-
ance the hard way. Five years ago,
she was hit with a baseless claim
from a nonclient third party in a
real estate transaction. Though the
claim was quickly dismissed, her
annual premium quintupled.
Swanson, then a solo for three
years in Gainesville, Fla., decided
she could not afford the premium,
so she chose to go bare, the term
for practicing without malpractice
insurance. Before long she was hit
with another claim from a different
nonclient third party in a private
adoption.
Swanson spent many hours
and $20,000 hiring an attorney and
defending the claim, far more than
she would have had to pay if she
had continued her malpractice cov-
erage. I'm going to continue to
carry it now, no matter how much it
costs, she says.
To Swanson, now of Swanson
& Sperling, the $2,500 she pays an-
nually to her professional liability
carrier is a valuable investment.
But some lawyers say the
money just isn't worth it.
Mandatory malpractice insur-
ance just isn't viable for some so-
los, especially if they don't have the
volume [of cases], says Charlotte
Coats-Siercks, who practiced in
Orange County, Calif., before
moving to Texas.
Woiing Without a Net
In spite of experi-
ences like Swan-
son's, many small-
firm and solo prac-
titioners are decid-
ing to forgo malprac-
tice insurance. In
addition to
the cost,
they say the
low-risk prac-
tice typical of solos
does not require it.
Although survey re-
sults differ, some es-
timate the number of
solo and small-firm law-
yers without the cover-
age as high as 50 per-
cent.
I think malprac-
Cynthia Swanson prefers to be
prepared for any situation.
ileen Coughenour (kcdela@ get sued once and that was dis- ical insurance, which cosi
now.com) Phoenix missed on a summary judgment mo- malpractice insurance. I
I can't belong to the County Bar tion. I was accused of putting a guy a cost of doing business.
72 ABA JOURNAL / SEPTEMBER 1998
it as
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Umbrella Coverage vs. Going Bare
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