Think that professional liability insurance is only for the large, multi-partner firms? Do you think your law firm is “safe” from liability?

After all, you’ve had the same client base for many years, and you’ve yet to have a lawsuit filed against you. Or, is your firm in a small town where everyone knows you or in a large city where you stay relatively under the radar?

The truth is that every day, professional services firms, both large and small, in huge metropolises or small villages, are held responsible for any number of events, many of which are completely outside their control.

Even if a firm and its professionals run a virtually error-free practice, they are still at risk of incurring blame for unforeseen events. Cybercriminals can illegally access data; clients sometimes have false expectations, resulting in dissatisfaction; forces of nature can cause major disruptions – all these events can cause fault to fall on a firm. If unhappy clients file a lawsuit, the costs have the potential to soar into the tens of thousands of dollars.

Can your firm afford this kind of large expenditure? For a fraction of the cost of a lawsuit, your firm can gain the peace of mind provided from not having to worry about suffering an unexpected enormous financial burden.


1. Credibility With Clients

If you have professional liability insurance, your clients will enjoy the peace of mind of knowing that if something unexpected does go occur, liability coverage will provide the ability to recoup their losses.

A professional liability policy is the equivalent of a warranty for the firm’s clients. It ensures clients that the firm has the financial wherewithal to back up their work in the event of an accidental professional mishap. Even if a firm isn’t at fault and is named in a lawsuit, it’s reassuring for clients to know that no matter the circumstance, your firm will be able to assist them with their needs in the future.


2. Provides Security to Your Firm For Alleged Errors and/or Omissions

Even a minor mistake can leave your firm vulnerable to potential legal action. A misplaced decimal point, a small typo, a lapsed deadline or a simple misunderstanding – all could result in a costly lawsuit. It’s not uncommon for a miniscule error to occur that results in thousands of dollars in damages. In the absence of professional liability services, the firm is responsible for correcting – and paying for – these innocent mistakes. Professional liability services will cover everything, including settlement costs and fees, attorney’s fees and court expenses.


3. Ongoing Risk Management Services

Most professional insurance providers also supply a level of risk management services for their clients that benefits not only the clients, but other firms and insurance providers. Clients benefit in knowing they are getting their services from a firm that offers the option to have a risk management specialist review their case and educate them about any possible situation. Firms benefit by extending their educational services and providing the best client services possible. Insurance providers benefit by helping the firm avoid any action that potentially could result in a costly claim.

In general, risk management services provide a resource center for broad, general situations that can be tailored to specific instances. These services are specifically targeted for professional industries, and most providers have 24-hour hotlines as well as online resources.


4. Minimize Costs

In an effort to save money, many small firms go without professional liability insurance and often opt out of risky work, accepting only so-called “safe” clients. However, the potential litigation costs stemming from even the smallest problem with a client can bankrupt a practice.

Professional liability insurance covers court costs and the settlement costs involved in a potential lawsuit. Without professional liability insurance, firms would incur all the expenses (i.e., attorney’s fees, court costs, settlements) in defending their firm. No matter the size of the firm or the customer, the cost of professional liability insurance will keep a firm’s outflow to a minimum with or without a lawsuit.


5. Additional Cyber Coverage Can Provide Resources Should a Digital Issue Occur

Has your firm taken all the steps necessary to prevent a cyber intrusion or a data breach? The answer is probably yes, for today. But as cyber criminals get more sophisticated, it’s becoming increasingly more difficult to ensure that your firm’s digital information is safe and secure.

Firms holding additional cyber coverage along with their professional liability insurance receive assistance in the prevention of and/or dealing with ransomware, data breaches or cyberattacks. By providing these cyber coverage resources, insurance companies reduce the risk a firm has and add to the overall comfort level the firm’s clients have in doing business with them.


One lawsuit has the potential to bankrupt or severely damage a firm’s financial standing. Professional liability insurance provides resources to help prevent lawsuits and the financial backing necessary to defend you or your firm should the need arise. For your potential clients, the coverage can also lay the groundwork for trust along with an assurance of quality work by your firm.