In 1993 the Alabama Legislature enacted the Limited Liability Company Act which allows a member of a limited liability company to be liable for a "negligent or wrongful act or omission" in which he personally participates as though he were a sole practitioner (§ 10-12-45). If attorneys practice in an LLC, will that reduce their malpractice premium rate?

Probably not. LLC acts are still largely unconstrued by appellate courts due to their recent enactment in most states which have them. The practical effect of the protection purportedly afforded under an LLC statute is yet to be determined. In any event, it is clear that an individual attorney who is alleged to have committed malpractice under an LLC must still be defended and/or indemnified. Where more than one attorney in an LLC participates in a case or transaction, it is likely that all participants will be the object of suit. Whether, in theory, one attorney is the focus of a suit or whether all attorneys in a firm are, it is doubtful that the LLC act will decrease insurance exposure. AIM will, however, watch this matter carefully. As a mutual insurer, AIM is committed to fair and reasonable premium rates. If it becomes possible to reduce the cost of malpractice insurance for attorneys practicing in LLC's, AIM will do so.

If my firm forms an LLC, can an individual attorney be insured separately?

No, as in the case of a partnership, professional corporation, or other corporation, the firm must be insured. AIM requires that all attorneys who practice together, regardless of entity type, be insurable and insured under one AIM policy.

What Our Insureds Say

"...Impressed with all aspects of their handling of the case from the initial intake to the consummation of settlement"

“About two years ago, I had a claim made against a co-counsel and me.  AIM hired excellent counsel to represent me in the matter.  There were very unusual circumstances in the case and AIM and counsel were able to get the claim settled without a suit being filed.  Everything they and the attorneys did was done with my full involvement and with the utmost consideration for all of the many and complicated aspects created by such circumstances.  I have nothing but praise for all that you and the AIM team did in this situation.”

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Attorneys Insurance Mutual of the South, Inc., Risk Retention Group

200 Inverness Parkway
Birmingham, Alabama 35242


Tel: 205-980-0009

Toll-Free: 800-526-1246

Fax: 205-980-9009

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