There are risks that come with practicing law. That’s the cold, hard truth, so there’s no reason to tiptoe around it. Insurance and professional liability for law firms are imperative and should not be taken for granted. Many law firms believe they are immune to malpractice claims or other forms of business-related lawsuits, but it’s important to remember it can easily happen to any firm.

Law firms vary in size, complexity, number of employees, and law professionals, so there’s no one-size-fits-all solution to insurance. The best practice is to be aware of the various types of insurance and professional liability for law firms available and to choose the policies which would best serve the firm, based on the kind of cases it takes on, the volume per year, and the firm’s unique makeup. 

Here are some considerations for law firms shopping for insurance, based on business needs, area of practice, and location. 

Insurance Rates for Law Firms

Law firms should understand how insurance rates are determined before choosing a policy. While there’s no clear-cut answer, insurance companies typically base their rates on a firm’s size, its areas of practice, its physical location, and the kinds of claims it takes on. 

Insurance companies will also consider the amount of risk the firm undertakes, which is typically determined by the complexity of the cases represented by the firm and the experience of the lawyers. In general, the more experience a lawyer has, the higher the firm’s insurance rates. This is due to the lawyer’s susceptibility to malpractice suits due to higher billable hours and stakes. Knowing this, law firms can get an idea of the premiums to expect.

While rates can be a burden, firms should always make sure they carry the proper amount of coverage. Studies show that lawyers have a 4-17% chance of being sued every year. The last thing that a firm wants is to be caught with a gap in their coverage and end up paying for it – literally. 

Types of Insurance for Law Firms

Practicing law leaves firms and lawyers vulnerable to risk, which is why legal insurance was created. Appropriate insurance policies can mitigate said risk and make it possible for legal professionals to continue in the profession, despite the inevitability of lawsuits. 

To help with this mitigation, insurance companies offer various types of insurance to ward against possible threats. The most common kinds of insurance include cybersecurity, professional liability (also known as malpractice insurance), and business owner’s policy. Some firms may need worker’s comp policies, and larger firms may opt for employment practices liability. An insurance agency can help law firms determine the best insurance coverage for their needs.


As the use of technology increases in the legal field, so has the risk of cyber attacks and breaches. Most firms keep clients’ sensitive data online, so the need for a cyber liability insurance policy is more important than ever. While cybersecurity best practices start within the law firm, this kind of policy will protect the firm and lawyers by helping them cover claims and deal with the financial implications of a data breach. 

Considering the nature of the information that a law firm may store digitally, it’s no wonder that they’re constantly being targeted by hackers. Breaches may be as direct as attempting to steal confidential information or as subversive as falsely representing the law firm to collect funds. This policy will help cover the costs to retrieve information and funds when possible and will help limit the risk by requiring certain cyber security measurements. 

Professional Liability

Professional liability is also known as legal malpractice insurance or errors and omissions insurance. Professional liability helps protect lawyers in the likelihood of lawsuits brought against them for mistakes made when providing legal services to a client. More often than not, these cases involve some form of negligence and can result in major payouts from a firm. 

These policies may be denied for firms practicing in areas with higher risk, or they may just incur higher premiums. Some examples include firms representing cases involving intellectual property, securities law, mass torts, real estate, and entertainment law. Professional Liability insurance does not cover malicious acts, fraud, criminal acts, or claims between lawyers who are part of the same insured law firm.

This policy is typically the first, and arguably the most important, kind of insurance that a new lawyer gets. Even the best attorney is at risk for a legal malpractice suit, but proper coverage would help the lawyer and firm cover legal defense costs and expenses. Coverage also helps with damages and settlements in the event that a client is awarded them. 

Business Owner’s Policy

A business owner’s policy (BOP) is an insurance policy that bundles coverage related to the business and property. This bundle may include policies such as general liability, commercial property insurance, or business interruption insurance. The general liability policy, in particular, will protect a firm from any lawsuit involving property damage or injury and covers claims for libel or slang. 

Property damage is typically included in a business owner’s policy and would include occurrences such as fire, flood, or other catastrophic circumstances that may affect the building and property. The bundle in its entirety is designed to protect the property, hardware, and furniture, as well as injuries to employees or clients that may occur on the premises.

Lawyers Insurance, the Silent Partner

While legal insurance and professional liability for law firm policies may come at an added cost, they’re a necessary component of practicing law. As the risk for cyber attacks continues to rise, a cyber policy is one that many firms are adding, no matter their size. In addition, it’s an unfortunate fact that many lawyers will not escape their profession without a malpractice suit, and every business owner can attest to the need for general liability coverage. 

Insurance policies are never enjoyable to research, acquire, or pay for. When the time comes for them to kick into gear, they’re the silent partner that every firm and lawyer will wish they had in their corner. Mitigate the risk of tomorrow, today by ensuring your firm has full coverage for every possible scenario with no gaps in sight.

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