Today’s legal landscape is incredibly complex, which is why attorneys and law firms often need professional advice when buying insurance. Before making a decision as to which coverage to buy, consider a number of important elements, including the features and additional benefits of each policy, the firm’s ratings, the cost of premiums, as well as options for payments.

Not every law firm needs the same policies, and many factors go into deciding the type of coverage your law firm really needs. Here, we provide a guide to assist you in what could be one of the most important decisions you make for your law firm.


Compare Policies

First things first ‒ when choosing an insurance carrier, you must compare the policies of each individual carrier. No insurance carrier is the same, nor are their policies. Many standard features are common to all policies, but when you look more closely at the policy details, you will probably discover some discrepancies.

To determine exactly what a policy entails, simply request a sample policy from the various carriers under consideration. Make note of the coverage that each carrier provides as well as the endorsements included in that policy. Not all professional liability insurance policies are alike, so make sure you do your due diligence and perform thorough research!


Compare the Added Policy Benefits

While comparing policy features is important, it’s equally important to compare the policy’s additional benefits. You should carefully consider a number of crucial factors:

  • Does the policy include a free, unlimited extended reporting period upon an attorney’s retirement or cessation of the private practice of law?
  • Is cyber insurance available?
  • What about supplemental coverage? 
  • Are additional costs associated with these benefits?

Many insurance carriers include a variety of “bells and whistles” in their coverage options in an effort to differentiate themselves from their competition in the marketplace. Determine which “extras” are most important to you and which will be most advantageous to your firm. For example, you may want to determine:

  • Are you considering retirement within the next five years? If so, you may want to look a bit more closely at the options for continuing coverage. 
  • Do you conduct a lot of business over email or utilize legal software? Ask your potential carrier about cyber coverage options. 

It’s in the additional policy benefits area that you can make the most of your investment in professional liability insurance.


Pay Attention to AM Best Ratings 

What difference does having an “A” rating with AM Best make? Why does it matter? An “A”-rated carrier is one that performs at the top of its industry in creditworthiness (the ability to repay creditors and pay any claims that are presented). Moreover, this rating demonstrates the company’s financial standing when compared with competitors.

Ratings range from an “A” or above, down to “C” or “D.” “C” or “D” ratings are considered extremely weak. The stronger the financial strength rating of a carrier, the more likely it is to not experience financial failure or close its doors.


Consult Your Local Bar Association

Local bar associations are a reliable, informative resource for finding service providers for any aspect of your law firm. Many bar associations publish a list of vendors for services ranging from case management software to insurance providers. 

In addition, the American Bar Association provides a comprehensive list of professional liability insurance providers. The list includes a myriad of details about each carrier, including: a basic outline of the types of coverage each carrier provides, the size of the firms they typically serve, the length of time the firms have been in business, the states they serve, and more.


Compare Premiums

Of course, it is important to compare the premium, but price is not the only concern. You must ensure that you are purchasing the appropriate coverage to protect your firm in the event of a claim or lawsuit. Premiums also increase when coverage is added to the policy, such as the addition of an outside limit for defense expenses, an annual aggregate, or a first dollar defense.

Compare Payment Options

Some professional liability insurance carriers require up-front payment of the annual premium, while others offer premium financing with different payment options available to divide the premium into monthly or quarterly payments. If you miss a payment, the carrier has the right to cancel your professional liability insurance policy.

Before you make a final decision as to which type of liability coverage to purchase, consider all these important elements of a sound insurance policy. Not every law firm needs the same coverage, and you should thoughtfully consider your firm's insurance needs.