Do you need small business insurance when opening a law practice?
October 27, 2014
Lawyers should consider getting small business insurance coverage for their law practice.
Lawyers are known as the small business owners with all the answers – and for good reason. They’re the professionals people turn to when they need help with complex business and legal issues and the seven or so years they spend in undergraduate and law school, make them a highly-educated bunch. So who do lawyers turn to when they need help? If they need help with a client’s legal claim against them, they turn to their business insurance provider. Considering that a lawyer's work is resolving legal disputes, it may seem like they’re above the need for small business insurance. But no business is exempt from risk. According to the American Bar Association, 5% to 6% of private attorneys face legal malpractice claims each year.
What sort of problems might cause a lawyer to wish he or she had small business insurance? It could be something as simple as a client visiting your office tripping on your briefcase or a power cord. Or maybe you’re calling on a client in their home or office and accidentally knock their smartphone on the ground, breaking it. General liability insurance – also called commercial general liability coverage, or GL – protects legal practices in cases like these from third party claims for bodily injury, associated medical costs, and damage to someone else’s property. Other potential legal minefields exist in the wide-ranging category of malpractice. Dissatisfied clients might hold you liable if a case is dismissed because of attorney negligence. If they feel you failed to adequately pursue a case, if you’re unable to secure experts and witnesses or act before deadlines or statutes of limitation run out – or any number of other issues that may injure your client - you and your business may be at risk. It seems like almost any advice or action can be second guessed. Therefore, malpractice insurance is probably a good idea. If your legal practice is one of the 5% that gets sued by clients, litigation will no doubt cost more than a malpractice insurance policy, possibly wiping out your savings by just defending yourself. Don’t take that chance with your legal practice. Make sure you’re prepared with the proper small business insurance coverage. Has your law firm benefited from small business insurance? Leave a comment below sharing how small business insurance has benefitted your business. The contents of this article and the linked materials do not offer legal, business or insurance advice related to the needs of any specific individual business. Hiscox Small Business Insurance is underwritten by Chicago-based Hiscox Insurance Company Inc., which is rated ‘A’ (Excellent) by A.M. Best Company. Additional information can be found on the Why Choose Hiscox? page. Coverages are subject to underwriting and may not be available in all states.