Authored by Sara Weathers
Plaintiff firms using a contingency fee model already face unpredictable revenue. Unexpected disruptions, such as severe weather, cyberattacks, or property damage, can significantly increase financial risk.
Business interruption insurance is essential in these situations.
Why It Matters for Plaintiff Firms
Unlike firms with steady billing cycles, plaintiff firms depend on case outcomes for revenue. If operations stop, income may halt completely.
At the same time, expenses continue:
- Payroll
- Rent
- Case expenses
- Technology and vendor costs
Without adequate coverage, even brief disruptions can cause financial strain.
What Business Interruption Insurance Covers
A comprehensive policy may cover:
- Lost income during downtime
- Ongoing operating expenses
- Temporary relocation costs
- Extra expenses to restore operations quickly
Coverage is typically activated by events such as fire, storm damage, or certain cyber incidents, depending on your policy.
Where Plaintiff Firms Often Fall Short
Underestimating Recovery Time
Many firms expect to resume operations quickly, but full recovery often takes weeks or longer.
Limits That Don’t Reflect Growth
As your firm grows, so do your expenses. Outdated policy limits may not cover current operating costs.
Overlooking Dependent Risks
Court closures, vendor unavailability, or system outages can disrupt operations even if your office is not directly affected.
How to Strengthen Your Coverage
- Recalculate your monthly operating expenses.
- Estimate realistic recovery timelines.
- Review policy triggers and exclusions.
- Consider coverage for extended business income.
Pair Coverage with a Continuity Plan
Insurance is only part of the solution. Firms should also:
- Enable remote work capabilities.
- Store files securely in the cloud.
- Maintain clear internal communication plans.
For contingency-based firms, downtime not only interrupts operations but also delays revenue. Business interruption coverage helps bridge this gap, allowing your firm to continue operating during unexpected events.
