Authored by Sara Weathers
As the end of the year is quickly approaching, many law firms begin setting goals, updating business strategies, and evaluating financials for the year ahead. One critical task often overlooked in the planning process is conducting a comprehensive annual insurance review.
An annual insurance review isn’t just a best practice; it’s a vital risk management step that can help protect your firm against evolving threats, operational changes, and costly coverage gaps. Starting this review now, before the new year begins, gives you time to make informed decisions and adjust your policies proactively rather than reactively.
Why Review Your Insurance Annually?
1. Your Risks Have Likely Changed
Has your law firm added new attorneys, changed practice areas, embraced hybrid work, or adopted new technologies? These changes could impact your insurance needs, particularly in areas like professional liability, cyber insurance, or employment practices liability.
2. Policies Can Become Outdated
Insurance policies are written based on the circumstances of your firm at a specific point in time. What worked a year ago might leave you underinsured today or paying for coverage you no longer need. Annual reviews help align your policies with your current operations.
3. Legal and Regulatory Shifts Matter
From new data privacy laws to rising expectations around cybersecurity, legal and compliance obligations continue to evolve. Reviewing your insurance helps ensure your firm remains compliant and financially protected against emerging liabilities.
4. Extreme Weather Events Are More Common
With severe weather events on the rise, reviewing your property and business interruption coverage is essential. Ask: Does your policy cover floods, hurricanes, wildfires, or prolonged outages? If not, now’s the time to update it.
5. It’s Budget Season
As your firm finalizes next year’s budget, reviewing insurance allows you to account for premium changes or invest in additional protection without surprises.
What Should Be Included in the Review?
- Professional Liability Insurance: Does your policy reflect current staffing and caseloads?
- General Liability and Property Insurance: Are your office spaces, equipment, and physical assets adequately covered?
- Cyber Liability Insurance: Does your policy account for the growing risk of AI-enabled cyberattacks and data breaches?
- Business Interruption Insurance: Do you have enough coverage to withstand unexpected shutdowns?
- Employee-Related Policies: Have there been any changes to your HR practices, benefits, or remote work setup?
Taking the time now to review your firm’s insurance coverage sets the foundation for a more secure and prosperous year ahead. Work with a broker who understands the unique risks law firms face and can help identify the right mix of policies for your specific needs.
Your clients depend on your firm’s resilience; ensure your insurance is as strong as your legal strategy. Need help with your firm’s insurance policies? AdvoCap Insurance is here to help!
