What insurance does a law firm need for its employees?

Once your law firm hires employees — whether paralegals, legal assistants, office managers, or administrative staff — your insurance obligations expand significantly.

Workers compensation is legally required in most states for any firm with employees. The threshold varies by state — some require it for the first employee, while others have a minimum employee count (typically 3 to 5). Workers comp covers medical expenses and lost wages for work-related injuries and illnesses, including repetitive stress injuries from computer work, which are common in law office environments. Premiums for office-classified employees typically run $0.15 to $0.40 per $100 of payroll.

Employment practices liability insurance protects the firm against claims by employees alleging wrongful termination, discrimination, harassment, retaliation, or wage and hour violations. These claims are expensive to defend even when the firm prevails — average defense costs run $75,000 to $150,000. EPLI premiums for a small firm typically range from $1,200 to $3,500 annually.

Your malpractice policy should cover the work of supervised non-attorney staff. Paralegals, legal assistants, and law clerks who perform legal support functions under attorney supervision are typically covered under the firm's malpractice policy. However, verify this with your carrier — some policies have specific language about non-attorney coverage that you should understand.

General liability through your BOP covers workplace injuries to non-employees (clients, visitors) and property damage. If employees regularly visit client sites, courthouses, or other locations, ensure your general liability coverage extends to off-premises activities.

Fidelity bonding may be advisable if employees have access to client funds or the firm's financial accounts. A dishonest employee who diverts client trust funds can create devastating liability for the firm.

As your headcount grows, additional requirements may apply. The ACA requires firms with 50+ full-time equivalent employees to offer health coverage. COBRA notice obligations apply to firms with 20+ employees. State-specific requirements — paid family leave, disability insurance, etc. — vary widely.