For the love of your business

Can You Use Your Employer’s Group Legal Insurance for Your Startup’s Legal Needs?

Contractors and Employees / Insurance

If you’re looking to turn your side hustle into your full-time career, you might be wondering if you can use your current employer’s group legal insurance for your startup’s legal needs. It’s common to opt for group legal insurance offered through your workplace benefits. These group insurance plans provide free legal assistance for a variety of needs from law firms that have contracted with the insurance company to perform the legal work.

While group legal insurance might seem like an easy option to save on your startup’s legal documents, it’s likely inadequate to serve the specific needs of your business and provide the ongoing legal support you need to turn your side hustle into a successful business.

Here are the reasons why your startup needs the kind of legal expertise and attorney-client relationship that goes beyond the scope of group legal insurance coverage. I’ll explore the potential pitfalls of using group legal insurance for your startup and share suitable alternatives to ensure your young business is protected and prepared for every stage of its growth.

 

One Size Doesn’t Fit All

When it comes to your startup’s legal needs, there is no such thing as a one-size-fits-all solution. Every business has unique needs and every business owner has different aspirations and definitions of success. Your business’s cash flow, expenses, and projected growth must be taken into account to craft comprehensive documents that will serve your business and your lifestyle.

Your current employer’s group legal insurance plan may offer some business legal services, but a generic set of business documents simply isn’t enough to protect your business and set it up for long-term success.

For legal services to work for your business effectively they must:

01 | Be customized for your business’s current stage of development and your goals for the business,

02 | Consider all aspects of your business, including its financial, insurance, and tax needs, as well as it’s company culture, and 

03 | Have a strong understanding of your business’s growth and be able to anticipate your company’s legal needs before an issue arises.

Unfortunately, the type of cookie-cutter legal documents you are likely to receive through your group legal insurance plan simply won’t include the kind of customizations necessary to deliver tailored documents that protect you and your startup from any issues that may arise in the future.

 

Legal Insurance Plans Nickel and Dime

Many group legal insurance plans boast free legal services after your deductible is paid, but what isn’t revealed is the limit of the coverage.

Only certain types of legal services are covered under group legal insurance plans. Business law is frequently covered, but creating your formation documents, auditing your tax status, writing contracts, creating employee handbooks, and planning for business succession are each considered separate claims. Instead, all of these tasks should be looked at together as part of the larger picture of your business’s health and needs.

Plus, some items that are required to finish certain legal steps, like notary stamps or fees to file documents with the state, are not included in the covered service and are charged to you as an extra expense instead.

More importantly, most legal insurance plans have limits to the amount of claims you can file for each type of service each year. For example, you may only be covered to create your company’s operating agreement once a year, but won’t be covered if you need to edit the operating agreement mid-year due to changes in your company’s structure or processes.

 

You Need a Heart-Centered, Holistic Planning Approach

Owning your own business is far more than filing Articles of Incorporation or running payroll. It’s also about proactively avoiding issues for your business and creating strong systems that your business can leverage for planning and growth.

What’s more, the needs of your business and the challenges you’ll face as a business owner are constantly changing. That’s why it’s crucial to work with an attorney who has an ongoing relationship with you and your business and who can advise you throughout your business journey, rather than just serving you one time with little understanding of your business needs.

As your dedicated Personal Family Lawyer® with a business law focus, I take a holistic approach by working closely with you to understand your business and the dreams and aspirations you have for your company and life as a whole. 

To do this, I start by getting to know you and your desires for your business. I then walk you through my LIFT Business Breakthrough Session™ where we look at your Legal, Insurance, Financial, and Tax systems to assess which areas need attention and make sure your business is built on a strong foundation.

From there, I offer several service models to address your needs on a flat fee basis or through monthly meetings as your Law Business Advisor. No matter which service model you choose, you always receive personalized service and can call on me at any time as an extension of your team.

 

Legal Insurance Plans Lack Long-Term Considerations

You may own your business for a short time or a lifetime, but no matter how long you own your business, it requires a continuum of proactive legal planning in order to limit liabilities and run smoothly. 

Your business may expand, team members may be hired and let go and tax laws change. Your business’s legal services need to keep up.

Sadly, group legal insurance makes it impossible for the attorneys it contracts with to get to know your business or provide the kind of ongoing legal advice that yields meaningful results. 

Under group legal insurance, your choice of attorneys is limited to the firms that have contracts with the insurance company, and there is no guarantee that the attorney you worked with this year will be available to help with changes in your business next year. 

Certain areas of business law, like negotiations and workers’ compensation, may not even be included in your coverage at all. Time-sensitive legal work needed as a result of a filing deadline or an emergency that affects your business’s succession plan may be impossible to carry out when using an attorney through group legal insurance. 

As a small business, you don’t have the time or resources to make legal mistakes or delays. And if you’re starting your business while still working for someone else, you really don’t have time to file insurance claims every time you need to meet with a business lawyer.

Instead, you want to work with an attorney who can pick up right where you left off, allowing them to quickly and effectively address your business’s legal needs with just a phone call.


Trusted Expertise in Business Legal Services

While group legal insurance may seem like the ultimate way to get your startup’s legal needs taken care of, the services available through these group insurance plans simply aren’t comprehensive enough to provide legal business services that will work for you and your small business long term.

Instead, it’s crucial to work with an experienced business attorney who gets to know you and your company on an intimate level.

You put your heart into your small business, and your business deserves personalized attention, technical expertise, and unwavering dedication of a Personal Family Lawyer with a business focus. That’s why I have dedicated my practice to mastering the intricacies of business law, allowing me to guide you through each phase of your business while working to proactively avoid issues for your business in the future. 

If you want to feel like your business attorney is a part of your team and not just an insurance claim, schedule a phone call with us. Together we can explore what an ongoing relationship as a Personal Family Lawyer® can do to turn your side hustle into a thriving business. 

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