In the Information Age, data breaches are a fact of life for businesses. In 2022 alone, approximately 1,800 data breaches impacted over 420 million people. Victims of data breaches can have their identities stolen and their personal information compromised, causing a mountain of financial, legal, and other difficulties.

Law firms are not immune from the threat of data breaches. Any firm with an electronic case management system or other methods of electronically collecting, storing, or using client information can be a target of a cyberattack.

Unfortunately, not all law firms take this risk seriously. According to the American Bar Association, only about half of the firms with 10 to 49 attorneys have cyber liability insurance. Smaller firms are even less likely to have cyber liability insurance.

But no matter the size of your firm, cyber insurance is crucial for lawyers.

3 Common Myths About Cyber Liability Insurance for Law Firms

Lawyers must take reasonable measures to safeguard the client data that firms possess or use. Failing to protect your clients’ data can not only be a violation of your ethical obligations as an attorney, but it can also expose your firm to civil liability.

Cyber liability insurance protects you and your firm in case of a data breach and subsequent lawsuit. But more law firms and attorneys do not secure this protection for various reasons, including the following three myths:

Myth 1: “My Firm Is Too Small to Be Hacked”

You may think that no hacker would target your firm because you are a small or solo firm. However, small businesses are not immune from being targeted by hackers. One survey found that 19 percent of small businesses experienced a full-scale data breach in 2021.

Myth 2: “I Don’t Need Cyber Insurance Because I Already Have Other Insurance”

You may think that you are protected in case of a data breach because you have malpractice insurance and a general liability insurance policy. However, malpractice insurance does not protect you from lawsuits if the data breach does not result from malpractice.

Similarly, most general commercial insurance policies will cover personal injury and property damage claims but will not cover purely financial loss claims suffered by your clients.

Myth 3: “I Can’t Afford Cyber Insurance”

While you may understandably not want to take on the upfront cost of cyber insurance, operating without this valuable insurance can cost you much more in the long term. A recent survey found that for companies with fewer than 500 employees, the average cost of a data breach lawsuit was nearly $3 million.

Beyond this, suffering a data breach and not having insurance to cover it could significantly affect your firm’s financial stability. Even if your firm’s finances are intact, being unprepared for a data breach or ransomware attack could damage your professional reputation.

Consider the Protection Offered by Cyber Insurance

Investing in an adequate cyber policy demonstrates to your clients that you are aware of the risk of data hacks and are committed to protecting them in the event that a breach happens to your firm.

Data breaches and other cyberattacks can affect law firms of all sizes, which is why all law firms should consider the protection that cyber liability insurance provides.