Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a legal consulting firm.
This article will discuss the primary insurance coverage for legal consulting businesses, general liability insurance, as well as additional policies that are appropriate for this industry.
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Legal Consulting Firms Need 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.
COMMON SITUATIONS FOR WHICH A LEGAL CONSULTING FIRM MAY HAVE GENERAL LIABILITY INSURANCE
Example 1: Your new billboard contains a copyrighted photograph, and the owner has sued you. In the event of a copyright infringement litigation, general liability insurance should cover your legal representation as well as any awarded damages.
Example 2: A customer attends a meeting with her kid, who smashes a glass vase and wounds himself. His medical expenditures should be covered by your general liability coverage.
Example 3: A delivery driver stumbles on the ice in your parking lot and sues for medical costs and missed work time. His losses and your legal counsel should be covered by general liability insurance.
Example 4: You’ve asked for a loan in order to relocate to a bigger workplace. As part of the loan conditions, the loan officer wants proof of liability insurance. These conditions should be met by your general liability coverage.
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
Legal consulting businesses in the United States typically pay between $400 and $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:
Location
Deductible
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 Legal Consulting 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 every legal consulting businesses should have are as follows:
Insurance for Professional Liability
Your customers depend on the professional knowledge of your staff. If they believe their requirements have not been satisfied, whether due to professional negligence or mistakes and omissions, professional liability insurance would cover a related lawsuit. The coverage, often known as Errors and Omissions (E & O) insurance, pays for expenditures and awarded damages up to the policy limits.
Insurance for Commercial Property
If your legal consulting practise is located in a privately held building, this should be included in your insurance portfolio. It encompasses business-owned assets held on-premises as well as the building.
Insurance firms may also tailor this coverage to cover just specified building parts for tenants. To obtain appropriate coverage, company owners should review their business strategy and requirements with an insurance specialist.
Commercial property insurance may be purchased as part of a company owner’s coverage (BOP).
Coverage Options for Some Legal Consulting Firms
In addition to the policies listed above, your legal consulting company 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.
Insurance for Data Breach
As a legal consultant, your company keeps a lot of personal and critical information. This might expose you to internet hackers. Because ordinary liability plans do not cover cyber assaults, data breach insurance may assist fill any gaps and keep your data secure.
This coverage, often known as cyber attack insurance, is available as an endorsement or as a separate policy.
Insurance for Workers’ Compensation
All company owners are required by the law to have workers compensation insurance on their employees. It covers workplace sickness and injury, including reimbursement for medical costs and missed earnings. If a claim leads to a lawsuit, workers compensation would cover the legal fees and damages granted to the company owner.
Workers’ compensation insurance is often bought separately.
Umbrella Liability Insurance for Businesses
You are no stranger to today’s litigious world as a legal consulting business. If a case filed against your company becomes costly and time-consuming, you may exhaust your underlying general liability limitations. An umbrella policy picks up where general liability insurance stops off, protecting your personal and professional assets.
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.