The Case For Liability Insurance For Lawyers And Firms
General liability is a type of commercial insurance coverage that protects multiple potential legal issues.
While some may assume lawyers and legal firms don’t need this type of coverage, they’re mistaken. General liability insurance handles the finer details if issues arise so that lawyers and other critical personnel can concentrate on handling more important, and more lucrative matters.
What Does General Liability Insurance Cover?
General Liability insurance protects firms against a myriad of simple, yet common potential problems:
Bodily Injuries is as it sounds. When a person claims they were physically injured at a lawyer’s office, or due to some fault of the firm, they will sue. This happens to companies and individual practitioners even when they are not at fault. A third party may trip on the sidewalk outside the office building, for instance, and sue the firm for medical bills caused by the fall. Defending individually or as a firm is time-consuming and expensive. A general liability policy takes care of the litigation expenses, pays settlements, and pays judgements when applicable as well.
Property Damages are claims that tangible property was damaged or destroyed. If a member of your legal team meets with a client at their home and accidentally scratches a table while moving a pen around, that table is damaged. The client will likely want it repaired or replaced, and this portion of a general liability policy will cover that.
Personal and Advertising Liability are grievances related to claims of slander, defamation, and copyright infringement. Say, for instance, an independent lawyer runs an advertisement that explains why choosing his services is best. A competing firm may feel that the advertisement put it in a bad light, even if the ad did not mention them specifically. Generally, liability helps bring these claims to settlement when possible and provides for expenses if it’s brought to court. Personal and advertising injury coverage pays for protection when the accused is not at fault.
Medical Payments are an arbitration tool designed to help avoid a lawsuit. Sometimes minor physical accidents happen that don’t need extensive hospital and recovery bills. Even if the lawyer or firm is not at fault for the physical injury, this portion of the medical liability policy allows for payment of simple medical treatments and care.
Rented Premises Damages is designed to provide protection for rented business spaces. Whether a firm leases or rents office space, accidents can occur that damage the property. An employee may overflow a toilet, for instance, or accidentally trigger the fire sprinkler system. These repairs are covered in this portion of the general liability policy. Office furniture and business assets are not covered, however, only the rented premises.
Other Things To Know
General liability insurance policies provide coverage based on either a claims basis or occurrence basis. The difference between the two is based on when an event occurred. An occurrence-based policy is the most common because it provides coverage based on when an injury occurs. Even if there is no claim filed for months or years into the future, the policy will provide protection because of when the incident occurred.
A claims-based policy operates solely on when a claim is filed. It will provide coverage for current or previous incidents. Any claims made in the future, however, when the policy is no longer active, will not likely be covered.
While rare, liability policies can be configured with deductibles in place. New firms and independent professionals may want to look into deductible options if costs are a concern.