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Professional liability insurance a must for lawyers

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Cynthia Tester, a former lawyer, is currently facing a $2 million malpractice lawsuit from her ex-client, Christine Ferer, who alleges Tester failed to adequately represent her during a lawsuit against Fenton Construction, reported Colorado newspaper the Aspen Daily News.

The newspaper said Tester was in the process of opening her own law firm in 2006, when she was representing Ferer in her case. The lawsuit against Tester contends she was often unavailable when Ferer required her services.

This suit against Tester demonstrates the importance of professional liability insurance for lawyers, particularly those just starting out in their own practices. The costs of a lawsuit could set attorneys back several years, without proper insurance.

Tester says she was ill when she withdrew from the case 18 months before Ferer lost the lawsuit against Fenton Construction, according to the paper.

Legal malpractice suits can often be very costly. In the state of Missouri, for example, 242 legal malpractice cases were resolved in 2010, with an average payout of $120,014, according to the state's department of insurance. In all, 61 of the settlements totaled $7.3 million.

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