What You Should Know About Attorney Liability to Third Parties

Attorneys commonly carry E&O (Errors and Omissions) insurance to protect against the risk of malpractice. Law is a detail-oriented field, and what seems like a small mistake on the part of an attorney could lead to a costly settlement. But what happens when if an attorney’s client commits a crime against a third party? Are attorneys liable for third parties?

There are several types of scenarios that can lead to attorney liability for damages suffered by a third party.

Third Party Damages Can Lead to a Lawsuit

A common example is fraud. If an attorney advises his or her client in such a way that helps the client commit fraud against a third party, the attorney is vulnerable to claims. In the process of advising clients, attorneys must keep this in mind. Any violation of fiduciary duty to which the lawyer contributed could lead to a lawsuit.

Attorneys Can Get Insurance for Third Party Liability

Third party liability insurance helps attorneys manage this risk and reduce the financial damage of a drawn-out lawsuit from a third party. This helps attorneys advise their clients with confidence.

In short, third party liability is a very real risk for attorneys, and any attorney who can imagine a situation like this happening with a client should consider acquiring insurance.