What happens after a malpractice claim is filed against my firm?

Once you report a malpractice claim, your insurance carrier initiates a structured claims handling process. The carrier first acknowledges receipt of the claim and assigns a claims examiner who reviews the policy terms, confirms coverage applies, and evaluates the initial facts. Within a few days to two weeks, the carrier typically retains experienced defense counsel to represent you.

The assigned defense attorney will contact you to gather detailed information about the underlying matter, review your file, and assess the merits of the claim. This initial investigation phase is critical because it shapes the defense strategy. You should preserve all documents, emails, billing records, and communications related to the matter, as these become essential evidence.

During the defense phase, your carrier covers attorney fees, expert witness costs, court filing fees, and other litigation expenses. Whether these defense costs erode your policy limits depends on your specific policy language. In many legal malpractice policies, defense costs are paid within the policy limits, meaning every dollar spent on defense reduces the amount available for a settlement or judgment. Some premium policies offer defense costs outside of limits, which preserves the full limit for indemnity payments.

Throughout the process, you will be consulted on major decisions including whether to file motions, retain experts, or explore settlement. If your policy includes a consent-to-settle clause, the carrier cannot settle the claim without your agreement, though hammer clause provisions may shift financial risk to you if you refuse a reasonable settlement offer.