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Company insurance is intended to safeguard the financial assets of a business owner and is a necessary investment for a legal practise.

Company insurance is intended to safeguard the financial assets of a business owner and is a necessary investment for a legal practise.

This article will discuss the primary insurance coverage for law firms, general liability insurance, as well as additional policies that are appropriate for this industry.

Law Firm General Liability Insurance

Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.

General liability insurance covers the following risks:

Physical harm

Damage to property

Medical expenses

Legal defence and decision

Personal and commercial harm

While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.


Example 1: A customer is approaching your office when she slips and fractures her ankle. She chooses to sue your company, saying that the stairs were dangerous. Your general liability insurance will cover the expense of your legal defence, including any settlement.

Example 2: One of your paralegals is hurrying to complete documents when she accidently knocks over a client while rounding a corner. The customer fractures her wrist and requests that your company cover the cost of her medical care. This is most likely covered by your general liability insurance.

Example 3: You’ve been employing a new logo that you believe accurately portrays your company. Unfortunately, a rival legal practise has sued over the emblem, alleging it is too similar to their own. Your general liability insurance coverage will cover your legal expenditures in defending your company.

Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.

General Liability Insurance Cost

Law firms in the United States pay an average of $400 to $700 per year for $1 million in general liability coverage.

The cost of your coverage will be determined by a number of variables. Among them are your:



Employees’ number

Per-occurrence restriction

The overall aggregate limit

You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.

Other Types of Coverage Required by Law Firms

While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all legal companies should have are as follows:

Insurance for Workers’ Compensation

If you have employees, your state will most certainly require you to obtain workers’ compensation insurance. Your coverage will cover your staff if they are harmed while on the job. For example, if a receptionist develops carpal tunnel syndrome on the job, your coverage would cover her medical care as well as her missed income while she recovered.

Insurance for Professional Liability

A professional liability coverage tailored to your legal practise will help protect your company against negligence lawsuits resulting from errors or failure to perform. If a customer alleges that your firm caused him or her damage, your coverage would pay for your legal defence and, if required, a settlement.

Coverage Options for Some Law Firms

In addition to the policies listed above, your law firm may need other forms of coverage based on particular elements of your activities. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.

Umbrella Insurance for Businesses

While a general liability insurance coverage is normally sufficient to protect your company, there are times when the limitations of your policy may be surpassed, such as if you lose a large case. When your general liability insurance finishes paying, an umbrella policy kicks in, allowing you to avoid having to pay the remaining losses out of pocket.

Insurance for Commercial Property

If your business property, including office furniture, computers, and legal references, were destroyed in an unforeseen disaster, such as a fire, it would be expensive to replace. As long as the loss was caused by a covered incident, your business property insurance would assist pay for replacement expenses.

Additional Security Measures for Your Company

Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.

With this in mind, here are a few steps you can take to better secure your company:

Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)

To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)

Keep your company licences up to date.

Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.

If your company is an LLC, you should check into LLC insurance.