Lawyers Insurance

Where There is a Will, There is a Lawsuit

What is Lawyers Insurance?

Lawyers insurance, commonly known as malpractice insurance, is a combination of insurance policies designed to protect the unique risks attorneys face. Typically, it reimburses attorneys for the losses incurred by the legal industry’s various risks. Moreover, malpractice lawsuits are the most common lawsuits in the industry.

If there is a lawsuit, there are legal expenses to pay whether you are at fault or not. This is because you have to pay the attorney fees and fight the case to prove yourself innocent. The Connecticut General Assembly states that a client can file a malpractice claim against you up to three years after the alleged misconduct.

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Why do You Need Lawyers Insurance?

Malpractice insurance helps lawyers cover their losses and make clients feel secure, plus some states require it. For instance, lawyer’s liability insurance is a legal requirement in Oregon and Idaho. However, in other states, firms need to notify their clients if they do not have insurance.

The benefits of lawyer’s insurance are:

  1. Protects you against claims of ignorance or negligence.
  1. Protects your staff against claims.
  1. Increases your goodwill and builds trust among your client base.
how much malpractice insurance do lawyers carry

What Policies Fall Under Lawyers  Insurance? 

Lawyers insurance packages many policies into one bundle. 

Business Owners Policy (BOP)

BOP provides coverage for small and medium-sized law firms. It combines commercial auto insurance, general liability insurance, and business interruption insurance into one package. Moreover, a bundled policy provides protection for your law firm and saves money on insurance premiums. As per the Insurance Information Institute, since the insurance is designed for smaller sized companies, firms with an annual income of less than $5 million and 100 employees or fewer are eligible for a BOP.

A BOP protects you against bodily injury, property damage, loss of business income, and loss of commercial property. For example, if your employee breaks an antique vase at a client’s home, a BOP will cover the loss for it.

General Liability Insurance

General liability insurance provides coverages for bodily injury or property damage losses. You might be liable to pay for third-party damages if an accident happens during your work hours or on your firm’s property. For example, if your client falls at your business premises, a general liability policy will keep you covered.

If you are a large firm, you will require a separate general liability insurance policy included in your lawyer’s insurance package. On the other hand, if you have a smaller firm, you can combine your general liability insurance in a BOP.

Commercial Property Insurance

Commercial property insurance provides protection to property owned by a business. Moreover, the insurance covers assets including hardware, electronic or any other belongings. Therefore, if you own an office building, commercial property insurance will protect you from named perils.

Worker’s Compensation Insurance

Worker’s compensation insurance covers your employees when they suffer from an illness or injury due to work. This policy is crucial in lawyer’s insurance because fighting legal cases can be stressful and dangerous. According to a survey by the Bureau of Labor Statistics, in November 2019 there were around 66,100 workplace injuries and 4,400 workplace illnesses in professional and technical services.

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Commercial Auto Insurance

Commercial auto insurance provides coverage to automobiles owned by a business. It also covers personal cars that you use for commercial purposes. As stated by Forbes, you can get a tax deduction when you use an automobile exclusively for business operations. If your employee gets in a car accident and their personal auto insurance is not sufficient to cover their losses, commercial auto insurance also provides additional coverage.

Cyber Liability Insurance

Cyber liability insurance provides coverages for losses caused by cybercrimes. These losses can be from data loss, misuse of online data, theft or malware. Cyber liability insurance covers both the direct and indirect costs of cybercrime. Also included are the costs related to lawsuits because of a data breach.

In 2011, Sony’s PlayStation Network was breached by hackers and exposed the confidential information of 77 million user accounts. Not only did Sony incur a loss of $2 billion but also was not indemnified for any data breach claims, as hacking incidents were not covered by its commercial general liability insurance policy. Therefore, as data breaches have increased in recent years it is important to have a cyber liability policy in your lawyer’s insurance package.

Commercial Umbrella Insurance

Commercial umbrella insurance will provide additional coverage to general and auto liability policies. For instance, if your employee gets an injury during a car accident while on the job, you must pay for their medical expenses. Moreover, the expenses might exceed the limits of the policy in play, which can cause substantial financial burden to your firm. In these types of cases, umbrella insurance comes to your aid.

Malpractice Insurance

Malpractice insurance covers professionals when a client sues them. You can also call this policy, lawyers professional liability insurance.

For instance, if a client sues you for professional errors, misjudgments, or malpractice, malpractice insurance will cover you. The American Bar Association states that a lawsuit for malpractice will be filed against four out of five lawyers once in their career.

Malpractice insurance for lawyers gives you the peace of mind to focus on your work and frees you from worries about bankrupting yourself if you make an honest mistake. For example, if a client loses a case and sues you for negligence, malpractice liability will keep you covered.

how much does lawyers malpractice insurance cost

Standard Exclusions

Some standard exclusions in lawyers insurance are:


Exclude Intentional fraud or criminal activities because these are uninsurable by law.

Legal services provided to firms related to or owned by your attorney are excluded.

Internal employee conflicts

Lawsuits for legal fights between the employees of the same law firm are excluded from the package as a general rule of thumb. Internal conflict management systems can help in resolving such issues.

Expected claims

If a claim was expected before purchasing a policy, it is not covered in the lawyer’s insurance. In some cases, the insurer might deny coverage even after advance notice.

Unnamed perils

Any perils except for named perils are excluded from the insurance package. Named perils are decided before signing the agreement for the insurance. Named perils generally include loss due to theft, fire and vandalism.

Cost of Lawyer’s Insurance

The premium costs for lawyers insurance differ for every attorney. The risks for each law firm are different and the cost varies accordingly. The factors affecting the cost of insurance for lawyers are:

  1. Past claims history
  1. Location
  1. Areas of operation
  1. Number of employees

Insurance can help lawyers pay for lawsuits and settlement costs. Contact an insurance agent and cover your loss instantly. Get a quote now!

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