Texas Law Firm Insurance
What keeps you awake at night? If you're an attorney, senior executive or
owner of a legal firm, the threat of a malpractice suit or the loss of
confidential client data probably ranks pretty high.
You don’t need us to tell you that we live in a litigious age. Or that the
cost of defending and settling lawsuits is on the rise.
So, knowing the you're properly protected against these and other risks are critical to your peace of mind.
How long has it been since you reviewed your current law firm insurance
policies? Or, if you're newly set up, how much time have you been able to
devote to investigating the coverages you need?
Unless you can answer either of those questions positively, here's some
useful food for thought about securing the right -- and the most
appropriate -- coverage for your firm.
What Types of Legal Practice Insurance Do I Need?
Without a doubt, the most essential insurance protection a law firm needs
is professional liability insurance often referred to as malpractice insurance. This coverage includes
protection against what is commonly referred to as errors and omissions risks as well as certain legal
activities such as notarizing and trusteeship.
On average, most lawyers can expect to face a malpractice claim once or
even twice during their practice.
However, professional liability coverage is not mandatory in Texas -- yet
the cost of defending and potentially losing a malpractice lawsuit could be
sufficient to put even a financially sound legal firm out of business.
(About one in five malpractice suits results in a payment or settlement.) *Not all professionally liability policies are the same.
It's important to distinguish professional liability from equally-important general liability coverage, which protects against bodily
injury and damage allegedly suffered on your office premises or as a result
of your business activities.
Third, you should have coverage against the key perils that can threaten.
your commercial property and contents, such as fire, theft
It's worth noting that smaller firms can often combine general liability,
property and income protection insurance into a single Business Owners Policy or BOP.
Another increasingly critical type of coverage for your law firm is cyber insurance or cyber liability insurance, to protect against data
breaches. An estimated 15% of law firms suffer this type of data loss every
year, which means that on average you can expect data loss every six or seven
Your systems may be secure but the loss of a mobile device or laptop can
also lead to data theft. Because of the confidentiality of client files you
store, the theft of personal data from your system could be catastrophic.
More Coverage Options
In addition to these types of legal firm insurance, you might want to
- Workers compensation insurance -- not a legal requirement in Texas but
highly valuable all the same. It protects your employees in the score of employment.
- Commercial auto insurance and/or coverage for vehicles you or your
employees own but also use for business. This will cover firm vehichcils as well as employees veciales during their scope of employee.
Advertising liability coverage.
Business interruption insurance.
Life insurance for key personnel.
- Umbrella insurance, which raises the limits of your coverage, kicking in
when your standard liability coverage is exhausted.
How Much Does Texas Law Firm Insurance Cost?
Many factors affect the premiums for Texas law firm insurance. These
- Number of attorneys.
- Liability limits and deductibles
- The individual attorneys years of experience. Longstanding lawyers are actually
more prone to malpractice claims than newcomers because policies usually
include "tail" coverage extending back across the individuals' legal
- Coverage for prior acts is crucial. A prior acts date will likely be reset if there's a
gap in coverage,
- Prior claims history.
- Areas of practice. Certain sectors of the legal framework are more
subject to (and sometimes more costly) claims.
- Number of years an attorney has had continuous coverage.
- The insurance carrier. Each firm has its own actuarial and underwriting
rules and priorities. There are fewer carriers for this type of coverage in
Texas than in many other states.
- The size of any deductibles.
Given all of these factors, it can be difficult to pin down policy
premiums. However, a new attorney might be able to insure against
malpractice for less than $2,000 for the first year, but their rates will increase each year between year two through five.
- Policies are written on a claims made basis. This means that the policy is covering not only claims from this year, but also previous years.
Where Can I Get the Best Law Practice Insurance for my Needs?
Law firm insurance in Texas is an increasingly complex collection of
coverages that needs to take account of the size and nature of your
business -- especially any areas of practice you provide -- and both
Federal and state regulatory and client disclosure requirements.
This calls for a level of insurance knowledge that law firms themselves are
unlikely to have and few agents may be qualified to offer. For
example, knowing how best to lodge a claim and the speed with which this is
done can be critical to resolving a malpractice allegation through the
process of "claim repair".
An agent that understands your specific needs and the legal industry
itself, like Pasadena Insurance Agency, can save you time, money and hassle
-- especially if or when you need to make a claim.
That applies whether you're a new practice seeking coverage for the first
time or an established law firm reviewing your annual coverage. By working
with multiple, A-rated law firm insurance carriers, an independent agent
should be able to customize your coverage and secure the most competitive
A good agent should also be able to provide you with solid risk management
Is it time to review your Texas law firm insurance coverage or, as a new
practice, to find answers to your insurance questions?
If so, contact one of our experienced law firm insurance agents at: 713-869-6991; we will take
the load off your back and make securing coverage an easy and