What is cyber insurance for law firms?
Cyber insurance for law firms provides financial and practical protection against cyberattacks, data breaches, ransomware, and digital fraud. It is designed specifically for legal practices that hold highly confidential client information, operate under strict regulatory obligations, and rely on continuous access to digital systems to function.
Unlike professional indemnity (PI) insurance, which covers claims of professional negligence or errors in legal advice, cyber insurance deals with digital risk. It responds to incidents such as data theft, unauthorised access, or ransomware that disrupt daily operations and threaten client confidentiality. Both types of cover are essential, but they protect against entirely different exposures.
For law firms, a single cyber incident can cause immediate reputational harm, regulatory scrutiny, and operational downtime. Cyber insurance helps manage these impacts by:
- Funding a forensic investigation
- Data restoration
- Legal guidance,
- Public relations support
Some policies also include access to expert negotiators and crisis managers who specialise in handling ransomware and business email compromise.
Because trust and discretion are central to legal work, even a small breach can lead to client loss or regulatory action from the Solicitors Regulation Authority (SRA) or the Information Commissioner’s Office (ICO). Cyber insurance provides an additional layer of assurance, ensuring that firms can respond quickly, recover securely, and maintain client confidence when incidents occur.
Why are law firms at high risk of cyber attacks?
Law firms have become prime targets for cybercriminals because of the unique mix of sensitive data, financial transactions, and time-critical operations they manage every day. To attackers, a law firm offers the same rewards as a financial institution but often with weaker defences.
Legal practices hold high-value, confidential, and time-sensitive information from merger documents and property contracts to personal client details and case evidence. This makes them a lucrative target for ransomware and data theft. If access to this information is blocked or leaked, it can immediately disrupt proceedings, damage client relationships, and trigger regulatory reporting obligations.
Many firms also handle large sums of client money through conveyancing, settlements, and trust accounts. This exposure makes them a leading target for business email compromise (BEC), where criminals impersonate partners or clients to redirect payments. These scams can result in significant financial loss within minutes.
Attackers also know that law firms rarely have the same level of cybersecurity investment as banks or large corporations, so smaller and mid-sized practices often rely on outsourced IT or ageing systems, making them easier to infiltrate.
Once inside, criminals can move laterally through systems, access files across departments, and exploit client trust to launch further attacks.
Law firms combine the three things cybercriminals value most:
- Sensitive data,
- Financial transactions,
- Urgency.
Without strong prevention and rapid response measures, even a single breach can have serious legal and reputational consequences.
Common cyber attack types targeting law firms
Law firms face a range of cyber threats designed to steal data, divert money, or disrupt operations. Attackers know that legal practices depend on trust, confidentiality, and continuity, making them attractive targets. The main attack types below show how these threats typically unfold and why every firm should prepare for them.
Ransomware
Ransomware remains one of the most damaging threats to the legal sector. It is a type of malicious software that locks access to your files or systems until a ransom is paid.
Attackers often encrypt case files, email servers, and document management systems, halting work across the firm. Some also copy sensitive data and threaten to leak it publicly if payment is not made, a tactic known as double extortion.
For law firms, the consequences are severe. Case deadlines can be missed, clients may lose confidence, and regulatory reporting to the Information Commissioner’s Office (ICO) may be required. Strong backups, multi-factor authentication, and quick notification to your cyber insurer are key to minimising damage.
Business email compromise (BEC)
BEC is one of the most common forms of cyber fraud affecting solicitors and conveyancers. Criminals gain access to or spoof an email account to impersonate a trusted contact, often a partner, client, or financial institution. They then send fraudulent payment instructions or intercept sensitive information.
These attacks often succeed because emails appear genuine, using familiar language and signatures. A single diverted payment can cost tens or even hundreds of thousands of pounds. Enabling multi-factor authentication, verifying payment details by phone, and training staff to spot subtle changes in sender addresses are the best defences.
Phishing and credential theft
Phishing emails are the most common entry point for wider attacks. They trick recipients into clicking malicious links, opening infected attachments, or entering credentials into fake login pages. Once attackers have valid usernames and passwords, they can access confidential files, client records, and email accounts.
Phishing campaigns targeting law firms often mimic legal portals, court communications, or document-sharing platforms. Regular staff training, email filtering, and clear reporting procedures help reduce this risk.
Malware and trojans
Malware and trojans are designed to infiltrate systems quietly and collect data over time. Attackers may use them to monitor activity, capture keystrokes, or exfiltrate client documents. Because these threats can remain undetected for weeks, they are often part of larger espionage or data-theft campaigns.
Firms can limit exposure by keeping software patched, restricting administrative rights, and using endpoint detection and response (EDR) tools to identify unusual behaviour before it spreads.
Insider threats
Not all breaches come from outside the organisation. Insider threats, whether intentional or accidental, pose a growing risk. Examples include employees clicking on phishing links, misdirecting confidential documents, or deliberately stealing data when leaving the firm.
Strong access controls, role-based permissions, and monitoring of file transfers can help reduce insider risk. Clear policies on data handling and regular training make staff aware of their responsibilities under GDPR and the firm's confidentiality rules.
Supply chain attacks
Attackers increasingly target third-party providers used by law firms, such as cloud storage, payroll, or document management platforms. A weakness in a supplier’s system can quickly become a breach for multiple firms at once.
Supply chain attacks are difficult to control directly, but due diligence helps. Assess your vendors’ security standards, ensure contracts include breach notification clauses, and maintain an incident response plan that covers third-party failures.
Denial-of-service (DoS) attacks
In a denial-of-service attack, criminals flood your network or website with traffic to make systems unavailable. Although less common than data breaches, these attacks can disrupt client communications and court filings, especially for firms that rely on online portals.
Most DoS attacks are temporary but can still cause reputational harm. Using managed hosting with DoS protection and having backup communication methods in place will keep client contact uninterrupted.
How cyber insurance differs from professional indemnity cover
Many law firms assume their professional indemnity (PI) insurance will cover cyber incidents, but in reality, the two policies protect against very different risks. Both are essential, yet they respond to separate types of events.
Professional indemnity insurance protects your firm against claims of negligence, mistakes, or breach of professional duty made by clients. For example, if an error in legal advice causes financial loss, PI would cover the resulting compensation and legal defence costs.
Cyber insurance, on the other hand, deals with digital risks such as hacking, ransomware, data breaches, and cyber extortion. It funds the cost of restoring systems, investigating the breach, notifying regulators, and managing public relations. Cyber insurance focuses on operational recovery rather than client disputes.
In practice, a phishing attack that exposes client data may not fall under PI unless the client proves negligence. Cyber insurance would respond immediately to cover forensic investigation, containment, and regulatory reporting costs.
For complete protection, law firms should hold both policies. PI safeguards professional advice and reputation, while cyber insurance ensures the business can recover quickly from digital disruption.
What does cyber insurance cover for legal practices?
Cyber insurance for solicitors and legal firms provides protection across every stage of a cyber incident, from the first response to the recovery of systems and reputation. The areas below highlight the main types of cover typically included in a specialist policy, with examples relevant to legal practices.
- Ransomware recovery and negotiation: Covers the cost of restoring encrypted files, rebuilding IT systems, and, where legally permitted, negotiating with attackers. For example, if a law firm’s case management system is locked by ransomware, the policy would fund forensic recovery and legal support to handle the extortion demand safely.
- Forensic investigation: Pays for cybersecurity specialists to identify how the attack happened, what data was accessed, and whether the breach is ongoing. For law firms, this often involves tracing how client files, email accounts, or document-sharing platforms were compromised.
- Client notification and identity protection: Funds the cost of contacting affected clients and providing credit monitoring or identity protection if personal data has been leaked. This is a key requirement under GDPR, where timely communication with clients is essential to maintain trust.
- ICO reporting and legal defence: Covers legal advice and representation for mandatory reporting to the Information Commissioner’s Office (ICO) and, if needed, defence against any resulting regulatory investigation. This support ensures the firm complies with GDPR while protecting its position.
- Business interruption and loss of income: Compensates for lost revenue and extra operating expenses while systems are offline. For example, if a ransomware attack prevents conveyancing transactions or court filings for several days, this cover helps offset lost billable hours and recovery costs.
- Crisis PR and reputational management: Provides access to public relations professionals who help manage client communications and media coverage during and after an incident. Quick, clear messaging can protect the firm’s reputation and reassure clients that matters are under control.
- Third-party liability and client claims: Covers legal costs and compensation if a client or partner suffers financial loss because of your firm’s cyber incident, for example, if an attacker diverts client funds after compromising a solicitor’s email. This extension helps protect both the firm and its client relationships.
What’s excluded or not covered?
Cyber insurance is designed to protect your firm from unexpected and uncontrollable incidents, but like all policies, it has limits. Understanding what’s excluded helps avoid surprises when making a claim and ensures your firm keeps the right protections in place.
While details vary between insurers, the cyber exclusions below are among the most common. Each situation reflects a belief by an insurer that the risk should be managed by the business, not transferred through insurance.
How much does cyber insurance cost for law firms?
Cyber insurance costs for law firms is pretty affordable compared to the potential cost of a serious breach. Premiums start from only a few hundred pounds per year, yet they can save a firm from losses running into hundreds of thousands.
Most policies are tailored to the firm’s size, risk profile, and systems. A small conveyancing or family law practice with fewer than ten users may pay between £300 and £1,000 a year, while larger or high-risk firms can pay several thousand. The price also reflects how securely a firm manages its data; strong controls like multi-factor authentication, patch management, and staff training can significantly reduce costs.
In simple terms, the more data you hold, the higher your potential exposure. Cyber insurance pricing works much like professional indemnity: the insurer assesses your digital risk, past claims, and the likelihood of disruption, then sets the premium accordingly.
Key cost factors to consider:
- Volume of client data: The more personal or confidential information a firm holds, the greater the exposure and premium.
- Use of cloud and email systems: Heavy reliance on digital communication or document sharing increases the likelihood of phishing and BEC incidents.
- Regulatory risk: Firms handling sensitive client sectors, such as finance, healthcare, or public contracts, face higher compliance costs and stricter scrutiny.
- Claims history: Prior breaches or frequent data loss events raise premiums much like car or PI insurance.
- Existing security posture: Insurers reward firms that can show strong cyber hygiene, including MFA, regular patching, and tested backups.
Cyber insurance remains one of the most cost-effective safeguards for law firms. Even at the higher end, the annual premium is minor compared with the potential financial and reputational damage of a major breach.
What happens if your law firm is breached?
A cyber breach can happen without warning. It might start with a partner locked out of their email, a sudden alert from your IT provider, or a client reporting an unusual payment request. When this happens, what you do in the first few hours matters more than anything else. A calm, structured response can make the difference between a quick recovery and weeks of disruption.
Cyber insurance is designed to guide you through those critical moments. Most policies give you direct access to legal experts, forensic specialists, and communications teams who deal with incidents like this every day. Here’s what typically happens after a breach, and how your insurer supports you at each stage. To learn more about the process in detail, see our breakdown of the cyber insurance claims process.
1. Detect the incident
Every breach starts with detection. You might notice unusual login activity, an employee unable to access key documents, or a security alert from your managed IT provider. Sometimes, a client might be the first to spot a problem, such as a suspicious invoice or payment instruction.
The first step is to confirm that the incident is real. Contact your IT team or managed service provider and review system logs. Avoid deleting or modifying files, as they may contain valuable evidence. Identify which systems are affected and isolate them if possible, keeping detailed notes of your actions and any error messages you see.
2. Notify your insurer immediately
Once you know a breach has occurred, notify your insurer or broker as soon as possible. Most cyber policies require this within 24 to 48 hours of discovery. Delays can limit your cover or slow down the response process.
Provide a short, factual summary of what happened, when it was discovered, and what you have done so far to contain it. You do not need to have every answer. Early notification triggers your policy’s support services, including access to specialist responders and legal counsel. Your insurer will assign a claims handler who becomes your central point of contact throughout the incident.
3. Insurer activates incident response
After notification, the insurer activates its incident response network. This usually includes digital forensics teams, breach lawyers, and crisis communication experts. These professionals work in coordination to contain the threat, protect evidence, and begin recovery.
The insurer manages this process to ensure that everyone involved is approved and covered under the policy. This removes the risk of hiring an unapproved vendor and gives you access to people who handle similar incidents every week. Most response teams can be engaged within hours, often on a 24/7 basis.
4. Forensic investigation and containment
The forensic team begins by identifying how the breach occurred and what data or systems were affected. They collect and preserve evidence, such as server logs, network captures, and ransom notes, so that both the insurer and any regulators can review it later.
If malware or ransomware is detected, the investigators will determine whether the infection is still active and will isolate or remove it safely. They also assess whether data was stolen, encrypted, or corrupted. If backups exist, the team will help restore systems securely, ensuring the restored data is clean and uncompromised.
In cases involving extortion, such as ransomware, specialist negotiators may assess whether the demand is lawful and proportionate. Most firms, however, focus on recovery through backups rather than paying the ransom.
5. Legal and regulatory support
Many cyber insurance policies include legal assistance as part of the response. Breach lawyers advise on compliance requirements under GDPR and data protection law. They help you determine whether the incident must be reported to the Information Commissioner’s Office (ICO) and, if necessary, draft the notification.
If personal or client data is affected, legal support will also help you prepare communication templates for clients, regulators, or suppliers. This ensures your messages are clear, compliant, and consistent with your professional obligations.
Some insurers also include public relations support. These teams work closely with firm leadership to manage external communication, helping you maintain trust with clients, partners, and the media while minimising reputational damage.
6. Claim review and settlement
Once the breach is contained and recovery is underway, your insurer will begin reviewing the claim in detail. This stage involves validating evidence from the forensic investigation, assessing recovery costs, and confirming the extent of business interruption.
You may need to provide supporting documents such as invoices, system logs, or time records for staff involved in recovery. The insurer’s adjuster uses these to calculate the total loss within your policy limits.
Once validated, the insurer issues a settlement to cover approved costs, which can include forensic work, data restoration, legal fees, and loss of income during downtime. If your policy allows it, interim payments may be made to help with urgent expenses while the claim is still being processed.
7. Post-incident review
After the claim is settled, most insurers conduct a post-incident review. This is not a formal audit but a collaborative session designed to improve future resilience. The review looks at how the breach occurred, how the response worked, and what measures can be strengthened.
Common recommendations include enforcing multi-factor authentication, updating outdated systems, testing backups more regularly, and refining your incident response plan. Completing these actions can reduce your premiums at renewal and demonstrate a strong security posture.