Also informally called legal malpractice insurance, an LPL policy generally covers liability arising from the rendering of professional services, including liability to a non-client (e.g., abuse of process or malicious prosecution). Both defense and indemnity are included, although be aware that defense costs normally erode the liability limit on a dollar-for-dollar basis (called defense-within-the-limits coverage). Defense-outside-the-limits coverage that does not erode the policy limits is sometimes available at an additional cost.

LPL insurance is written exclusively on a claims-made basis. It covers claims “first made” during the policy period, regardless of when the underlying act or omission occurred (subject to the retroactive date in the policy). The claim must also be reported to the carrier within the policy period or a short grace period after policy expiration.

Coverage is subject to other conditions and exclusions.

A BOP policy bundles commercial general liability insurance and property insurance. The general liability coverage is needed for other non-professional-liability exposures, such as premises liability (e.g., a slip-and-fall) and advertising injury (e.g., libel, slander, invasion of privacy, copyright infringement, and misappropriation of advertising ideas). The property insurance part of the policy covers the building and contents. The policy also normally covers business interruption from a fire or other catastrophe. Coverage is subject to other conditions and exclusions.

EPLI generally covers the defense and indemnity of certain types of employee lawsuits, such as for sexual harassment, discrimination (including sex, race, age, or disability), wrongful discharge, and other employment-related actions. EPLI is written on a claims-made basis. It can be purchased as a stand-alone policy, as an endorsement to a BOP, or as part of a management liability policy. Coverage is subject to other conditions and exclusions.

D&O is liability insurance covering the law firm’s directors and officers while serving in such capacities. It is essentially errors and omissions coverage for the firm’s managers in connection with their management duties. The firm is also covered for amounts it expends pursuant to its duty to indemnify a director or officer under the firm’s organizational documents. The most likely plaintiff is a disaffected partner–make sure that you get a policy covering such a claim (many do not). Defense costs normally erode the liability limit on a dollar-for-dollar basis. When combined with EPLI and possibly other management-related coverages, it is called a management liability policy. Coverage is subject to other conditions and exclusions.

Cyber is an emerging form of insurance that has yet to converge on a standard policy form. In general, there are two types of cyber coverage: first-party and third-party. First-party generally covers the insured’s response costs to a data breach or security incident, including the cost of restoring lost data and associated business services, notifying affected individuals, credit monitoring services, extortion and ransom payments, and business interruption losses. Third-party covers defense and indemnity of third-party claims (e.g., a suit by a client whose data was compromised) and governmental regulatory action. Institutional clients, especially in the financial and healthcare sectors, increasingly require that a law firm carry such coverage. Coverage is subject to other conditions and exclusions.