Running a law firm in Pennsylvania means juggling a lot of responsibilities, and figuring out your insurance obligations shouldn't feel like solving a legal riddle. The good news? Pennsylvania takes a relatively hands-off approach compared to some states. The potentially confusing news? Just because something isn't required doesn't mean you can skip it. Let's break down exactly what insurance you need to have, what you should probably have, and what you can skip.
Professional Liability Insurance: Not Required, But You'll Want It Anyway
Here's the thing that surprises a lot of new attorneys: Pennsylvania doesn't actually require you to carry malpractice insurance. Unlike states like Oregon or Idaho that mandate coverage, Pennsylvania trusts you to make your own call. But before you celebrate the cost savings, there's a catch.
Under Pennsylvania Rule of Professional Conduct 1.4(c), if you don't carry at least $100,000 per occurrence and $300,000 aggregate professional liability coverage, you must tell every new client in writing. And if your coverage drops below those amounts or gets cancelled? You have to inform existing clients too. You'll also need to keep records of these disclosures for six years after the representation ends.
Think about it from your client's perspective. When you hand them a form saying you don't have malpractice insurance, what message does that send? Most clients will wonder why you're practicing without a safety net. It's like a surgeon telling a patient they don't have medical malpractice coverage. Technically legal, but not exactly confidence-inspiring.
Additionally, you must disclose your insurance status on your annual fee form to the Pennsylvania Supreme Court. The Pennsylvania Disciplinary Board even created an online database where the public can check whether an attorney carries professional liability insurance. Your insurance status is now part of your public professional profile.
Workers' Compensation: Absolutely Required
Unlike professional liability insurance, workers' compensation isn't optional in Pennsylvania. If you have even one employee, you need coverage from day one. This includes your paralegals, legal assistants, receptionists, and associates. Full-time, part-time, seasonal—doesn't matter. They all need to be covered.
The state takes this seriously. We're not talking about a slap on the wrist if you don't comply. Misdemeanor convictions for failing to carry workers' comp can result in a $2,500 fine and up to one year in prison. Felony convictions? That's a $15,000 fine and up to seven years in prison. Yes, you read that right—prison time for an insurance violation.
Workers' comp covers medical expenses and lost wages if an employee gets injured on the job. Your paralegal slips on ice in your office parking lot? Covered. Your associate develops carpal tunnel from years of typing? Covered. The coverage kicks in on the eighth day after the injury for wage loss benefits, and if the employee misses 14 days of work, they'll receive retroactive payment for the first seven days.
One important note: if you're a solo practitioner with no employees, you typically don't need workers' comp. But the moment you hire someone—even a part-time assistant—you're on the hook for coverage.
General Liability Insurance: Probably Not Required, But Often Demanded
Pennsylvania doesn't require law firms to carry general liability insurance by law. But here's where things get practical: your landlord probably does. Most commercial lease agreements require tenants to carry general liability coverage, often with the landlord named as an additional insured. Try signing a lease for office space without proof of insurance and see how far you get.
General liability covers bodily injury and property damage that occurs on your premises or as a result of your business operations. A client trips over a rug in your waiting room and breaks their ankle? That's what general liability is for. You accidentally spill coffee on a client's expensive laptop during a meeting? Also covered.
The key distinction: general liability doesn't cover your legal work. That's what professional liability insurance is for. General liability is about physical injuries and property damage, not missed filing deadlines or botched contracts. Many attorneys mistakenly think general liability protects them from malpractice claims. It doesn't.
Typical coverage limits for law firms range from $1 million per occurrence to $2 million aggregate, though your specific needs may vary based on your practice area and office setup. If you frequently meet with clients in person, you'll want robust coverage. If you practice primarily virtually, you might get away with lower limits.
Commercial Auto Insurance: Required If You Have Business Vehicles
Pennsylvania requires all business-owned vehicles to be covered by commercial auto insurance. If your firm owns a car that employees use to visit clients, attend court hearings, or run business errands, you need commercial coverage. Your personal auto policy won't cut it.
What about when your associate uses their personal car to drive to a deposition? That gets trickier. You may want to consider non-owned auto liability coverage, which protects your firm if an employee causes an accident while using their personal vehicle for business purposes. It's not required by law, but it plugs a significant liability gap.
Exemptions You Should Know About
The professional liability disclosure requirements don't apply to everyone. If you're a full-time government attorney or work as in-house counsel for a company without any private clients, you're exempt from the disclosure rules. That makes sense—you're not practicing law in a traditional client relationship where malpractice insurance would typically apply.
However, if you're an in-house attorney who also takes on a few private clients on the side, you're back to needing insurance or disclosing that you don't have it. The exemption only applies if you have zero private clients.
How to Get Started with Law Firm Insurance
Start with the non-negotiables: workers' compensation if you have employees, and commercial auto if you own business vehicles. Get quotes from insurance carriers that specialize in Pennsylvania law firms—they'll understand the specific risks and requirements better than a general business insurer.
For professional liability insurance, programs like the Pennsylvania Bar Insurance Program through USI Affinity and CNA offer coverage specifically tailored for Pennsylvania attorneys. These programs often include benefits like free continuing legal education credits and risk management resources that help you avoid claims in the first place.
When shopping for general liability coverage, look for policies that offer at least $1 million per occurrence. Compare quotes from multiple carriers and ask about bundling discounts if you purchase multiple policies from the same insurer. Many carriers offer Business Owner's Policy (BOP) packages that combine general liability with property coverage at a reduced rate.
Remember: insurance isn't just about checking boxes to comply with state law. It's about protecting the practice you've worked hard to build. One malpractice claim, one workplace injury, or one slip-and-fall lawsuit could derail everything. Get the coverage you need, document your compliance, and sleep better knowing you're protected.
