Law Firm Insurance That
Takes Care of Your Practice
Here’s What You Need to Know
As a lawyer, you understand the impact risk can have on businesses. So you understand that you need to take steps to protect your business against the risks you face. Read on to find out about legal insurance coverage law firms like yours typically need, and most often purchase, from The Hartford.
Coverage for Home-Based Businesses
As someone who works from home, you may not think that you need special coverage for your business. And while home-based business coverage may be available through your homeowner's insurance company, it might not provide enough -- or the right types -- of coverage to protect you from the risks you face.
Depending on your policy, you might be lacking coverage for:
- Business equipment losses
- Your garage or other detached structure if used primarily for business
- Injury to clients who come to your home for business purposes
- Property damage caused by you or your employees
- Business-related losses that occur away from your home office.
Something else you might want to consider: Homeowner’s policies don't typically cover data breach losses, which are becoming more common every day. In addition, you could be left vulnerable if you lose income because you are not able to use your home office because of a fire or other unexpected event. And it is likely you're not covered for lost or damaged business records.
That's why you should talk to your insurance agent or a representative from The Hartford to find out whether you need additional coverage for your home-based business.
Business Owner’s Policy
At a minimum, most lawyers and law firms have a Business Owner’s Policy (BOP). Why? Because it helps protect your business in much the same way that a homeowner’s policy protects your home and personal possessions.
By combining some of the most important coverage’s small business owners need including Business Liability, Business Property and Business Income, a BOP can save you money while helping to safeguard what you’ve worked hard to build. It also provides an easy way to purchase optional, additional coverage tailored to your business.
The place where you do business – whether you own or lease it -- is vital to your day-to-day operations. And, no matter how careful you are, unexpected events, such as fire or vandalism, can and do happen. Having property coverage could mean the difference between complete catastrophe and a minor blip. In the event of a loss, you should consider property insurance that not only covers damage to your buildings and furniture, but also your computers and the other things you need to keep your business up and running.
These days, even the most careful business owners can be sued. And, even if the outcome is in your favor, you know the legal costs can be staggering. Business Liability coverage helps protect your business from the cost of some claims for damages caused by your employees and the operation of your business . It also helps cover the cost of your defense. So, how much coverage do you need? That depends on the types of legal services your firm provides. An insurance agent – or a representative from The Hartford – can help answer your questions.
In addition to Business Property and Liability coverage, a BOP may include Business Income coverage (also referred to as Business Interruption coverage). This helps cover loss of income when you can’t run your business because of covered property damage caused by an unexpected event. For example, a fire causes your business to close for 3 days while repairs are made. Business Income coverage can help you meet ongoing financial obligations from such an event, like rent and payroll.
Optional Coverages Businesses Like Yours Often Buy
For a law firm, computers and data help support your day-to-day operations -- from maintaining employee and client files to filing and accessing court documents to maintaining accounts receivable records. Also consider the software you may use to track “talk time” with clients for billing purposes.
What would happen if an employee mistakenly opens an email attachment that contains a virus and the virus crashes your network and corrupts your electronic files?
Computers and Media coverage will help pay to research and replace lost data so you can get back to taking care of your clients.
For many law offices, receivables can make up a large percentage of total assets -- especially for firms that handle cases on a contingency basis.
Imagine what could happen if:
- You are unable to collect outstanding balances because an employee spilled printer toner on paper records.
- Your paper receivables records are damaged because a fire broke out in your building or office.
- A sink overflowed in the bathroom above your office, and water seeped into your file cabinets, damaging your records.
Accounts Receivable coverage helps cover the cost of researching and replacing these records, in addition to expenses to recover the dollar amounts owed by clients.
We all depend on services such as power and communication in our everyday lives. For a law firm, these services are essential to the work you do.
Service interruptions are often beyond your control. But think about the impact it could have on your income if you need to shut down because:
- A storm downs power lines and computer service is not available for several days.
- A water main blows up cutting off the water supply to your business. Due to the extensive work involved in repairing the break you can’t open for 2 days.
Unfortunately, 40% of small businesses forced to close due to a storm will never reopen.* The Hartford’s OPUS coverage helps replace lost income, so you can pay ongoing expenses like rent and payroll. And, our coverage automatically includes features you won’t find from many other insurance companies, including:
- Only a 12-hour waiting period before coverage begins
- A $25,000 starting minimum coverage limit
* Source: Protecting Your Businesses, FEMA, last updated 3/1/2013
Think about the types of papers and records your law firm creates and stores: Depositions, interrogatories, motions, briefs, wills, trusts, legal malpractice records, real estate deeds, complaints, meeting minutes, memos. The list can be endless.
Think about the impact if:
- There was a fire in your building; and the water used to put it out damaged important records.
- Your office sprinkler system malfunctioned, causing water to seep into your file cabinets and damaging files.
Valuable Papers & Records coverage can help pay the cost to reproduce important documents, temporary storage and moving records to avoid a loss.
Did you know you could be sued for bodily injury or property damage caused by a vehicle not owned by your business but used for company business? This can include a rented or hired vehicle.
How could this happen?
- An employee, using her own vehicle, hits a pedestrian in a crosswalk while picking up legal paperwork.
- You rent a vehicle to attend a legal conference and rear-end another car, causing damage to the other vehicle and injuring the driver.
- An employee, using their own car, hits a telephone pole while out dropping off legal briefs.
The fact is personal auto policies generally don’t provide coverage when a vehicle being used for business purposes is involved in an accident. If you or your employees use your personal vehicles for business, you probably need Non-Owned / Hired Car coverage.
*For businesses without owned or long-term leased vehicles that would need to be covered on a Business Auto policy.
Did you know you could be held liable for damages to a property you rent for business?
Imagine how much it could cost you if you’re held responsible for leaving a sink running, it overflows and causes damage to the space you rent. And think how much more it could cost if the water flows next door and causes damage to another tenant’s property.
Tenant’s Legal Liability coverage helps protect you if your landlord sues you for damage you cause to property you rent or if you cause damage to the property of another tenant in the same building or complex.
Law firms often store information about their employees or customers, including social security, bank account, debit/credit card and tax identification numbers. And, if that information is lost or stolen, it could leave your business vulnerable to regulatory fines, penalties, compensatory damages, and possibly ruin your reputation.
Contrary to popular belief, the risk of a data breach is not just a problem for big businesses and hacking isn’t the only way a breach can occur. Consider what could happen if:
- An employee’s car is broken into and a laptop containing sensitive customer information is stolen.
- An email containing sensitive employee or customer information is sent to the wrong person.
- Client records containing tax identification numbers are taken during a break-in.
Many business owners aren’t aware of the costs associated with a data breach – or the actions they may need to take to address the liabilities they face – if their paper or virtual records are lost or stolen. If you collect or store any personally identifiable information on employees or clients, you should consider data breach coverage.
The Hartford’s data breach program offers coverage to help pay for costs associated with notifying impacted individuals, public relations, good faith advertising and legal liability expenses. Customers also have access to services that can help reduce the likelihood of a breach and assistance to help navigate a breach if one occurs.
Smart and savvy employees are central to the success of a law practice. And the benefits you provide to your employees help keep them engaged and motivated to do great work.
However, errors in administering your employee benefits could be costly. Have you thought about what could happen if your benefits administrator fails to enroll an eligible employee in your group health plan, and the employee is later denied coverage for a pre-existing condition? You, the employer, could be held responsible for the employee’s healthcare costs – and maybe more.
Employee Benefits Liability coverage helps protect your business if you are sued for an error or omission related to the administration of your employee benefits program, including your group health insurance.
Stretching Your Dollar
It doesn’t have to be expensive to get valuable extra coverage for your legal business. It’s possible to stretch your dollar through our Stretch® endorsements. For law firms, we offer:
- Legal Basic Stretch
- Super Stretch for Legal Providers
- Super Stretch for Law Offices
- Super Stretch for Legal Business Services
These industry-focused endorsements bundle key coverages for law firms, providing a cost-effective solution that helps take the guesswork out of selecting additional coverage that’s helpful to your practice.
While you might find it hard to believe, employee theft represents a significant risk to your firm. Client files and other legal documents often contain sensitive, valuable information that could be misappropriated by your employees. Client funds may also be held in accounts maintained by your firm, leaving you exposed.
Imagine what could happen if:
- Your employee uses the sensitive, valuable information in a client’s file to steal funds.
- An employee in your accounting department enters a fictitious consultant into your payables system and begins cutting checks to that consultant that she ultimately cashes?
Employee Dishonesty coverage compensates you for financial loss resulting from the fraudulent acts of an employee or a group of employees.
If you have one or more employees, you probably need workers’ compensation insurance – most states require it. Without it, you may be held personally liable for the cost of your employees’ medical care for a work-related injury or illness. And even their wages while they’re recovering and potentially fines for failing to purchase coverage as may be required by state law.
The laws vary by state, but full-time and part-time employees are generally covered by workers’ comp. In some states, business owners, partners and officers must be covered too. Also keep in mind that the definition of “employee” can vary by state. If you use subcontractors, it’s important to find out whether they’re considered employees by law. If you’ve issued your sub, or anyone else, a 1099, they may be eligible for coverage under your workers’ comp policy.
Workers’ comp provides benefits to your employees for work-related injuries or illnesses. This includes medical care, wages from lost work time, rehab, disability benefits and survivor or death benefits.* And, if one of your workers gets hurt on the job and their family decides to sue you, workers’ comp can help with legal fees and more.
Providing workers’ comp coverage for more than a century, The Hartford’s program sets the standard for value, innovation and injured worker care.
*Benefits vary by state, according to state law.
For some, a Business Auto policy conjures up images of a fleet of vehicles used by high-powered lawyers. The truth is you may need a Business Auto policy for vehicles used in the typical operation of your business. This could include vehicles used to:
- Run errands to pick up the mail, office supplies, lunch for an important client meeting or to make a deposit at the bank.
- Deliver legal documents to clients.
And, if you or your employees use a personal vehicle for these types of activities, consider that personal auto policies generally don’t provide coverage when a personally-owned vehicle, used for business purposes, is involved in an accident. Not sure if you need a Business Auto policy? An insurance agent – or a representative from The Hartford – can help you decide.
The Hartford’s Business Auto policy includes 19 coverage enhancements, without separate elections or additional premium charges. And, features like our Fender Bender and Accident Forgiveness programs help premiums low.
All coverages and services may not be available for all businesses or in all states. For details on what coverages and services are available to you, contact your agent at The Hartford today.
This site outlines in general terms the coverages and services that may be afforded under a Hartford policy. All policies must be examined carefully to determine suitability for your needs and to identify any exclusions, limitations or any other terms and conditions that may specifically affect coverage. In the event of a conflict, the terms and conditions of the policy prevail. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company or life and accident insurance company subsidiaries of The Hartford Financial Services Group, Inc.
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