LLPs and Professional Malpractice Insurance: Grading the Mortgage Grader Decision

A limited liability partnership (LLP) is first a general partnership that makes a special election for LLP status, thereby achieving limited liability for the partners. 1 Many states, including New Jersey and Kentucky, require that, in order for a law firm to elect LLP status, it must have in place malpractice insurance or similar protections for clients. 2 The rules as to the maintenance of malpractice insurance are, however, generally silent as to the consequences when that requirement is not satisfied.