With new opportunities come new risks, like any insurance agent worth their license will tell you. Even though attorneys likely pride themselves on their ability to recognize and avoid risk, especially when it comes to their practice, the truth is we all live in interesting times, and the challenges facing small businesses today are unique.
With the sheer volume of information available and the near constant potential for distraction, it would be easy for someone in a position of authority to simply choose to buy all the options and over-insure themselves in the interests of avoiding even the slightest possibility of a problem arising from what they might believe was foreseeable.
Fortunately, things aren’t quite that bad. If you are an attorney either in private practice or even employed in an attorney-client capacity, here are some things to consider.
Almost all companies that do business with the public and a high number of those who only serve other companies carry some form of business insurance. If you are working on your own or are running a small firm, this kind of policy is a must, as it will alleviate you of the responsibility of defending yourself against what might be considered nuisance lawsuits.
General liability coverage combined with a policy to replace your income in the event property damage or other incapacity prevents you from practicing law are a good solution to the basic needs of the average law firm. You might also consider commercial property insurance, especially if you lease your office or store client property on the premises.
Leaving aside the obvious joke about our litigious society, the truth is you may need occasional protection from your clients, especially when it comes to matters of business and commercial litigation. Your Bar Association likely recommends malpractice insurance and may also serve as a resource for you to find representation in the event you run across an unsatisfied former client. While this kind of insurance is rarely used, having it in place before you run into problems will provide you peace of mind at the very least.
Any experienced attorney knows insurance policies are among the most complex documents ever drafted by man. Finding all the potential loopholes and coverage gaps in numerous interlocking insurance policies is often a task best left to a jury, which is why the insurance industry invented umbrella coverage. If your primary insurance either refuses to cover a claim or if your coverage limits are reached, having a buffer between you and your personal or business assets may end up saving your firm and your practice.
Insurance is like advertising. Half the expense is probably wasted, but nobody can say for sure which half. Premiums are just part of the cost of doing business. One thing is certain, however. Insurance is a necessity in a risky business world.