One of the most common questions I get from attorneys is this:
“What’s the difference between a claim and a potential claim—and when do I actually need to report it?”
It’s a great question, and the answer can have a major impact on whether your malpractice coverage protects you when you need it most.
What Is a “Claim”?
A claim is typically straightforward. It involves a clear allegation of wrongdoing or a demand for money. This could be a lawsuit, a formal demand letter, or any situation where a client (or former client) is asserting that an error caused them harm.
At that point, most attorneys know they need to notify their insurance carrier.
What Is a “Potential Claim”?
A potential claim is less obvious—but just as important.
This is when you become aware of a situation that could lead to a claim, even if no one has formally complained yet. Common examples include:
- Missing a filing deadline
- Discovering a mistake in a document or case strategy
- Receiving communication from a client that suggests dissatisfaction (including online reviews)
- Realizing something may not have been handled correctly
In these situations, nothing has escalated yet—but there’s a reasonable chance it could.
Why Timing Matters When It Comes To Legal Malpractice Claims
Most legal malpractice policies are claims-made policies, which means coverage is triggered based on when a claim is reported—not just when the incident occurred.
That’s why the distinction between a claim and a potential claim is so important.
Reporting early isn’t just a requirement of the policy—it can also work in your favor.
Getting your carrier involved sooner can help reduce defense costs, improve the chances of resolving the issue efficiently, and give you more options if the situation develops into a formal claim.
In fact, many malpractice claims don’t begin with a lawsuit—they start as smaller issues that weren’t addressed early.
The Risk of Waiting To Report A Claim
It’s not uncommon for attorneys to hesitate before reporting a potential issue. There’s often concern about how it might impact premiums or whether it’s “too early” to involve the carrier.
But waiting can create serious problems.
If you’re aware of a potential issue and choose not to report it—and that issue later turns into a claim—there’s a risk your carrier may deny coverage altogether.
A Simple Rule to Follow
If there’s any doubt, it’s usually better to have the conversation early.
You don’t need to have all the answers, and reporting something doesn’t mean it will automatically turn into a claim. It simply puts you in a better position if it does.
If you’re unsure about your current policy or what should be reported, it’s worth taking a few minutes to review your coverage and get clarity before an issue arises.
If you have questions about your current coverage or want a second opinion, feel free to reach out 412.563.2106