Right-sizing your firm's liability insurance

Clear Guidance Partners has multiple licensed insurance experts on staff, and works with many firms through our sister company Beltex Insurance.

Lawyers Professional Liability (LPL) insurance is already an expensive policy, and cyber continues to increase year after year. What can a firm do to make their insurance renewals easier, and ideally keep costs steady, or better yet, bring them down?

General Insurance Planning

Most carriers allow you to get quotes and renew 45 to 60 days out. If your agent is not on top of things, reach out and tell them to get started. The more time you have, the better the outcome. Last minute additional paperwork, changes to policies, and getting additional quotes take time. In one recent situation, a Beltex client was able to find a substantially better rate on a new policy, but was forced to renew their existing high priced policy because they waited until the (literal) eleventh hour.

Lawyers Professional Liability (LPL)

What won’t change much: the base pricing. Unless your firm is in certain practice areas (such as IP) or has a large amount of claims, the formulas for pricing LPL are pretty standard.

What you can change: There are few small claims in LPL, so a lower deductible does not make sense, and only makes the premium (price) go up. For larger firms, a target deductible is 1% of annual revenue. For smaller firms, you will typically see an impact on the premium once your deductible is $25k or higher.

Cyber

Cyber insurance is the wild west of the insurance industry. Each year, programs and carriers are sold, while a new group starts up. The same carriers move in and out of certain industries, with legal particularly impacted.

The biggest thing you can do to help your cyber insurance pricing and renewal is improving your cybersecurity. For 2024, carriers are looking for:

  • Multifactor authentication for all external access (such as webmail, VPN)

  • Security awareness training for all employees at least quarterly

  • Offsite/cloud backups at least weekly

  • Patching any exposed systems within 30 days, especially for HIGH and CRITICAL vulnerabilities

  • Basic financial controls for bank transfers

Additionally, you are doing the firm a disservice by not getting multiple quotes each year. The market is changing so rapidly that your best carrier option last year may not be the same this year. There are little to no incentives to renewing with the same carrier.

How can Clear Guidance help?

  • Happy working with your current agent? Our consultants can sit at your side as a risk advisor, helping you navigate the process for the best results.

  • Ready for a change? The Beltex team has years of experience working with and in law firms. With access to 40+ carriers plus their own market leading cyber policy, Beltex will get you the best coverage every time.

Dustin Bolander