What insurance do you need if you manage a legal practice? While law firms tend to be careful about what they can and can’t say – that doesn’t mean they can’t make mistakes which can be costly to the business should a claim be made against them.
Of course, how much insurance your law firm needs depends on a lot of factors, which is why speaking to an insurance broker is always advisable before taking out any insurance policy.
However, that doesn’t mean that there isn’t general advice out there on the minimum liability insurance that law firms should be looking for.
Minimum Liability Insurance Amounts
Some will recommend that the minimum liability cover you need will depend on the size of your law firm. For instance, those with larger firms might need a minimum of $25 million annual coverage, while smaller firms might need less with just $5 million.
But it isn’t just the number of lawyers in your firm that can impact how much coverage you should have. There are other contributing factors such as the number of clients you deal with, the value of the cases/work you undertake, and the distribution of your services – or Areas of Practice.
If for example, you are worldwide with a large client base of high-value case work, your coverage should be significantly higher than that of those who deal with lower-income clients who need representing in local matters.
All factors should be considered when deciding on how much liability insurance you need.
Don’t Be Underinsured When It Comes To Professional Legal Liability Insurance
Remember that when it comes to professional liability insurance, it’s always better to have adequate or slightly more rather than too little. If you have the latter, then you could be personally financially responsible should a claim be made against you and your policy limits are too low. This can have a devastating impact on your business and personal finances.
If you need help with insurance for your law firm, speak to a member of the Professional Liability Insurance Group, and we’ll be happy to advise you on the best policy terms for your business.