In the late 1970s, the North Carolina Bar Association faced the realization that there were no good options for legal malpractice insurance.
The professional liability insurance market was unstable, insurance premium costs were at an all-time high and continuing to rise, and the commercial companies dominating the insurance market had no commitment to the legal profession.
In January 1977, the Chairman of the North Carolina Bar Association's Insurance Committee and its Executive Director met with members of the North Carolina Insurance Commission to discuss the feasibility of organizing a mutual liability insurance company, the first such company for lawyers in the country.
The support of the Association's members was overwhelming. The Association's members, attending its annual meeting in Asheville, approved the formation of a lawyer-owned insurance company on June 15, 1977. Lawyers Mutual was chartered in September of 1977. During the next three months, lawyers invested in this new venture dedicated to ensuring that North Carolina lawyers would always have a place to turn for protection. Most of the initial investors put up $1,000 each, some using their credit cards. Company licenses were granted in March of 1978, and policies issued in May.
The principal reason in making the company a mutual insurance company was to eventually place equity in the hands of the attorney-policyholders rather than in the hands of stockholders who may or may not hold policies. The Company's financial strength grew very slowly at first, but a long period of excellent underwriting results and strong investment returns allowed the Company's surplus to grow.
Now Lawyers Mutual has a strong capital base and is well positioned to serve our policyholders even as North Carolina law firms are growing in size of firm and location of offices. Lawyers Mutual is the only carrier that has continuously provided coverage to the members of the North Carolina Bar for over 40 years.
Mutual companies declare dividends when financial results exceed expectations. Since 1999, Lawyers Mutual has paid dividends fourteen times with more than $9.24 million dollars returned to policyholders.
What began as a vision has now endured for over 40 years - a professional liability insurance company owned and controlled by the lawyers of North Carolina.