How often should law firms review their insurance?

Regular insurance reviews are essential to ensure that your coverage keeps pace with your firm's evolving risk profile. A policy that was adequate when your firm launched may be insufficient two years later if you have added attorneys, expanded into new practice areas, or significantly grown your revenue.

The annual renewal is the natural checkpoint for a comprehensive review. Sixty to ninety days before your policy expiration, your broker should initiate the renewal process. This involves updating the carrier on changes to your firm since the last renewal, including attorney count, practice area mix, revenue, and claims activity. It is also the appropriate time to evaluate whether your policy limits remain adequate, whether your deductible is still appropriate, and whether the policy terms continue to meet your needs.

Beyond the annual renewal, certain events should trigger an interim review. Adding a lateral hire, particularly one with a claims history or a high-risk practice area, warrants immediate consultation with your broker and carrier. Opening a new office, especially in a different state, may require adjustments to your coverage territory or the addition of policies that comply with local requirements. Merging with or acquiring another firm creates significant insurance implications that must be addressed proactively.

Revenue growth is a frequently overlooked trigger for an insurance review. If your firm's revenue has increased substantially, your existing policy limits may be insufficient relative to your current exposure. A firm generating $2 million in annual revenue has a fundamentally different risk profile than one generating $500,000, even if the attorney count has not changed.

Changes in client composition can also warrant a review. Signing an institutional client, taking on a matter involving securities litigation, or beginning to handle real estate closings all alter your risk profile in ways that your current coverage may not adequately address.

Technology changes are increasingly relevant as well. If your firm has adopted cloud-based practice management, implemented client portals, or begun accepting electronic payments, your cyber exposure has changed and your cyber policy should be reviewed accordingly.

Finally, a claim or potential claim should always prompt a review of your coverage. Even if the claim is ultimately resolved favorably, the experience often reveals gaps in coverage, inadequate limits, or policy terms that could be improved. Use the claim as a learning opportunity to strengthen your insurance program going forward.