Walker & Company
Why Is This New Insurance Quote So Much Cheaper? What Law Firms Need to Know Before Jumping In
If you’re a law firm and you’ve been shopping around for professional liability or business insurance, there’s a good chance you’ve come across a quote that looks almost too good to be true.
You might be thinking, “Wow — this is way less than we’re paying now! Did we just get lucky?”
I get this question all the time. As someone who works with law firms every single day, I can tell you: seeing a drastically lower premium isn’t uncommon. But before you get too excited, it’s worth digging into why that number is so much lower. Because, as much as I’d love to tell you it’s always good news, more often than not, it means there’s something missing.
Why the big difference?
Here are a few reasons a new quote might come in much lower than what you’re used to paying:
1️⃣ Coverage differences
Not all policies are created equal. Lower premiums often mean reduced coverage limits, higher deductibles, or stripped-out supplemental coverages (like disciplinary defense or cyber).
Some quotes exclude certain practice areas, reduce prior acts coverage, or have tricky settlement clauses buried in the fine print.
2️⃣ Missed or outdated underwriting details
This is the one I see trip up firms the most. Many firms stay with the same carrier for years, and their applications get renewed on autopilot. Over time, no one updates the application to include a small but crucial detail:
- Maybe you handled securities litigation years ago and stopped, but that was always disclosed to your current carrier.
- Maybe you had a claim from more than five years ago that isn’t being asked about in the new application.
- Or perhaps there’s a coverage endorsement that was added to protect a particular area of practice, but it’s missing in the new quote.
These little details matter a lot. Your current carrier may have underwritten your policy with full awareness of those risks. A new carrier, if they don’t ask (or you’re not prompted to disclose), may quote a lower premium — but they might later decline coverage or rescind the policy if that information comes out.
3️⃣ New markets pushing for growth
Sometimes, a carrier new to the legal space will come in aggressively priced to win market share. While this can be a great opportunity, it still requires careful review. Are they financially stable? Do they have a track record in handling claims for law firms? What do their claims settlement practices look like?
What to do if you see a much lower quote
If you’re comparing quotes and one is significantly cheaper, my biggest piece of advice: don’t just look at the price.
Ask:
- What’s actually included?
- What might be missing?
- Is the policy wording as strong?
- Did they ask the right questions about our history and practice areas?
A strong broker or advisor should help you break all this down clearly (and candidly). That’s exactly what we do for our clients — we dig into the fine print so you’re not left exposed when it matters most.
Bottom line
A lower premium can be great — as long as you understand why it’s lower and what trade-offs come with it. Before making a move, take the time to really dig into the details, compare the actual coverage, and make sure nothing important is missing. It’s always better to ask the hard questions up front than deal with surprises later.