Law Firms insurance – cost and types of policies

Whenever you budget the expenses of your business, Law Firms insurance must be high on the list because you can’t always know exactly what could happen in the future.

With the protection provided by insurance against accidents and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your Law Firms enterprise, you must consider how much financial liability you are taking on.

If your Law Firms business runs without proper insurance, you are taking a giant chance not just of losing some money but of a total wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

In this article, we are giving very general guidelines for small businesses to explain what the main kinds of insurance that you need are, and where available, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Law Firms business?

What this means, for any Law Firms business owner, is that if some person claims that your work caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Law Firms business is not protected by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like New Jersey, there are specific monetary levels that limit the amount a judge can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a person more than they have sued for.

When you are running your Law Firms operations, you can’t deny responsibility for the outcomes of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as a corporation, all of that liability belongs to you alone.

What does Law Firms insurance protect you from?

For your Law Firms business, the most important kinds of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

Also there are some official kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any Law Firms business owner should know when negotiating the insurance needed.

The main headings of insurance for your Law Firms businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Law Firms business is dealing directly with other people, and that means you usually have the danger that some accident can happen to them personally or else something of theirs can be spoiled.

In such a case, they can sue you for compensation.

General liability insurance policy for your Law Firms business covers you against claims coming from injury to clients or damage to their property.

It protects your Law Firms business from the claims themselves and also to any resulting court costs and legal fees of the lawsuits.

In many cases, it can also help you to qualify for extra business from city and state organizations, where contracts insist on proper liability insurance.

The normal level of general liability insurance for your Law Firms business would be with a upper limit of $1 million for a single claim and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Law Firms insurance operations.

Professional liability insurance for your Law Firms business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Law Firms business for them, you can quickly have to fight a court case.

Even if the lawsuit against you is judged in your favor, the cost of defense can be high, and the impact on your reputation can be damaging.

Almost all small Law Firms business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

See the table in the cost of Law Firms insurance section below for average prices of professional liability insurance for your Law Firms operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that what you delivered didn’t meet your description of function, or that your recommendation was basically incorrect.

You need to be aware of the specific laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for injuries caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Law Firms

Only you can know exactly how much insurance you need.

Best advice is to talk to experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your Law Firms business

Take care! – practically all policies for private vehicle insurance do not cover any happening like theft or accidental damage when the van is being used for business purposes.

The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a proper commercial vehicle insurance package.

Commercial car policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is insured if your van is involved in an accident.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The wanted value of the insurance depends on the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your Law Firms business needs specific and dedicated equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.

The tools may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy whatever needed to keep your Law Firms business running.

It is difficult to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your Law Firms business’ equipment.

Commercial Property insurance

Any Law Firms business that owns or rents space in a building needs a commercial property insurance policy.

If you own the property, you probably have a substantial capital investment, along with a big liability if there’s a mortgage.

Every physical building location should carry insurance coverage for the value of the premises and contents against accidental occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your Law Firms business operates in areas of high risk, like Florida or North Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where intense cold snaps can cause damage to outer coverings of Law Firms business premises, there is a need for more additional cover than in warmer climes.

Because the level of cover depends completely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Law Firms insurance section below to give some idea of the average prices per million dollars of property insurance for your Law Firms business.

Temporary insurance by month, week or day for your Law Firms business

Is your Law Firms business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Law Firms – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having identical risk cover.

The important feature of short-term insurance is that you purchase the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of better business activity, get the existing cover improved.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Law Firms business

You have the option to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP merges commercial property and public liability insurance by incorporating these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized Law Firms businesses, such as yours.

There are two limits that will dictate whether BOP is suitable for your own business.

BOPs do not cover your professional liability or commercial vehicle policies.

Also, the size of your business will dictate whether you are eligible to take out BOP cover.

The usual business that can take out a BOP policy must have no more than one hundred employees, and not more than five million dollars in annual turnover.

In addition, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Law Firms business employees

In most states, it is mandatory to have workers compensation insurance when your Law Firms business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s regulations in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only permit coverage from the government-run monopoly state funds.

In these states, you cannot obtain your workers compensation obligations from private insurance corporations.

Workers compensation rates are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every Law Firms insurance need is unique, there are enough examples of average quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your Law Firms businesses needs.

Cost of insurance for your Law Firms operations depends on many different factors.

We have estimated these figures for small self-employed Law Firms businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like Utah, they will be about 20%-30% lower.

The location and size and type of your Law Firms business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another useful source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for Law Firms operations?

This is an umbrella term used to describe basic insurance policies designed to protect Law Firms business owners from risks like bodily injury, property damage, claims of negligence.

Does my Law Firms business have to have insurance?

Some of the kinds of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Some other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Law Firms business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a third-party for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Law Firms insurance.

How much will Law Firms business insurance cost?

As well as the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

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