I am an employed solicitor but an old family friend has just asked me for assistance with applying for probate on his mother’s estate. This is not the first time friends and family have asked me for free or cheap legal advice. I don’t want to bring them to my firm as clients and have to time cost them at solicitor rates because their issues are really minor but at the same time it really worries me that if something goes wrong I am not covered. Is there anything I can do?
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Answer by Neha Sharma, Hillsdale 2036 NSW
- Professional indemnity insurance is insurance that provides a certain level of financial protection for professional people when they are providing professional services.
- In Australia all professionals are obliged to have professional indemnity insurance.
- If a professional is sued because they have breached their professional duty the insurance company pays for any claims that are:
- ordered by court; or
- agreed between the parties at settlement providing the agreement has been approved by the court.
- This just means that the compensation amount is handled by the insurance company rather than coming out of the individual's own pocket. It helps professional to avoid a situation of falling short of any compensation amount.
- As an employee lawyer any legal services you provide through your firm are covered through your firm’s insurance policy.
- However any advice you give to friends and family when you are not acting as an employee is unlikely to be covered.
- In NSW professional indemnity insurance for lawyers is provided by LawCover. You can call LawCover on 1800 650 748 and ask whether they can provide you with what is informally known as “dinner party cover.”
- In order to obtain LawCover insurance you may need to hold an unrestricted practicing certificate and have completed a practice management course authorised by the Law Society.