What insurance do I need to start a law firm?

Launching a law firm requires assembling an insurance portfolio that protects against the professional, operational, and financial risks inherent in running a legal practice. While every firm's needs are slightly different, there is a core set of coverages that every new firm should have in place before opening its doors.

Professional liability insurance is the foundational coverage. As discussed elsewhere, this policy protects against claims of malpractice, errors, or omissions in your legal services. Most carriers offer policies designed specifically for new firms, with first-year premiums that reflect the limited exposure period. Start with limits of at least $500,000 per claim and $1 million aggregate, and increase as your practice grows.

General liability insurance covers claims of bodily injury and property damage arising from your firm's operations. If a client slips and falls in your office or if you damage a client's property, general liability responds. Most commercial leases require tenants to carry general liability coverage, typically with limits of $1 million per occurrence and $2 million aggregate. A business owner's policy (BOP) often bundles general liability with commercial property coverage at a favorable rate.

Commercial property insurance covers your firm's physical assets, including office furniture, computers, law library, and files. If you lease your office, your landlord's insurance covers the building itself but not your contents. Even if your firm's physical assets are modest, replacement costs add up quickly.

Cyber liability insurance is essential from day one. Law firms handle sensitive client data immediately upon opening, and a data breach can be devastating for a new practice. Policies are available with limits starting at $250,000 for new firms at relatively modest premiums.

Workers compensation insurance is required in virtually every state if you have any employees, including part-time staff or legal assistants. The premium is based on your payroll and the classification codes assigned to your employees.

Additional coverages to consider include employment practices liability insurance (EPLI), which covers claims by employees alleging discrimination, harassment, or wrongful termination. Business income insurance covers lost revenue if your office becomes unusable due to a covered event. If you or your attorneys use personal vehicles for firm business, ensure your auto insurance includes appropriate business use coverage.