California Rules of Professional Conduct Rule Rule 1.4.2: Disclosure of Professional Liability Insurance
You don't have to disclose if you have liability insurance, or what the limits of those insurance are. And you don't have to carry insurance. However, you have to disclose if you don't have insurance.
I don't know how this Rule developed (I haven't done the research, but I might). I can speculate that there was either a high profile case or a series of cases or a common industry practice that was perceived to harm the public that this Rule is designed to correct.
The language of the Rule:
(a) A lawyer who knows or reasonably should know that the lawyer does not have professional liability insurance shall inform a client in writing, at the time of the client’s engagement of the lawyer, that the lawyer does not have professional liability insurance.
(b) If notice under paragraph (a) has not been provided at the time of a client’s engagement of the lawyer, the lawyer shall inform the client in writing within thirty days of the date the lawyer knows or reasonably should know that the lawyer no longer has professional liability insurance during the representation of the client.
(c) This rule does not apply to:
(1) a lawyer who knows or reasonably should know at the time of the client’s engagement of the lawyer that the lawyer’s legal representation of the client in the matter will not exceed four hours; provided that if the representation subsequently exceeds four hours, the lawyer must comply
with paragraphs (a) and (b);
(2) a lawyer who is employed as a government lawyer or in-house counsel when that lawyer is representing or providing legal advice to a client in that capacity;
(3) a lawyer who is rendering legal services in an emergency to avoid foreseeable prejudice to the rights or interests of the client;
(4) a lawyer who has previously advised the client in writing under paragraph (a) or (b) that the lawyer does not have professional liability insurance.
Link to Rule with Comments:
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