Claim time is not the time to find out the attorney has no malpractice coverage for the reported claim. Attorneys that do work for clients where the attorney is involved with client management or ownership may run afoul of attorney malpractice policy exclusions. As no two client relationships are the same and no two policies are alike, where an attorney is doing legal for clients with an ownership or management role it is wise to read the entire policy. Where one malpractice insurance policy may provide coverage, the same client relationship with another malpractice policy excludes coverage. Depending on the attorney’s attorney/client relationship(s) there may be no coverage provided by the attorney malpractice policy.
The ISMIE Insurance policy excludes certain client ownerships, management and/or directors/officer legal work from coverage.
V. EXCLUSIONS
This policy does not apply to any Claim based upon or arising out of::
D. Professional Services performed for any person by an Insured, if at the time of any negligent act, error or omission giving rise to the Claim, such Professional Services were rendered to an Immediate Family Member.
E. Professional Services performed by an Insured for any entity, or any individual partner, member, director or employee of such entity, if at the time of any negligent act, error or omission giving rise to the Claim:
1. such Insured or his/her Immediate Family Member controlled or owned more than 10% equity interest, operated or managed such entity; or
2. such Insured or his/her Immediate Family Member was a partner, member, director, officer or employee of such entity.
H. an Insured acting in the capacity as:
1. an executor, administrator or personal representative of an estate or as a trustee if the Insured or their Immediate Family Member is or was a beneficiary or distributee of said estate or trust;
2. an officer, director, trustee, partner or other member of a governing body of any entity other than the Named Insured and other than an accreditation or standards entity within the scope of Section IV., Definition Q., Professional Services, paragraph 5.; or
3. a public official or employee of a governmental body, agency or subdivision thereof, unless such capacity is deemed as a matter of law to be a public official, employee or representative of such entity solely by virtue of an Insured rendering Professional Services.
IV DEFINITIONS
H. Immediate Family Member means a:
1. parent;
2. child;
3. grandchild;
4. brother;
5. sister; or
6. past or present spouse,
of any past or present Insured.
I. Insured means the Named Insured, Predecessor Firm, and:
1. any present or future principal, partner, director, officer, member or employee of the Named Insured;
2. any former principal, partner, director, officer, member or employee of the Named Insured or of a Predecessor Firm;
3. the estate, heirs, executors, administrators, assigns and legal representatives of an Insured but only in the event of such Insured’s death, incapacity, insolvency or bankruptcy, and only to the extent that such Insured would otherwise have been provided coverage under the terms, conditions and exclusions of this policy;
4. any contract or temporary employee of a Named Insured under the direct supervision of an Insured; and
5. any lawyer acting as “of counsel”;
but only with respect to Professional Services performed within the scope of their duties on behalf of the Named Insured or Predecessor Firm.
J. Insurer means the insurance company named in the Declarations.
K. Named Insured means the entity, individual, partnership or corporation shown in Item 1. of the Declarations.
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Affected insured attorneys should not solely rely on the information provided in this blog. As facts may differ, determining malpractice coverage for each attorney client relationship requires a complete review of the malpractice policy. The facts that cause an alleged malpractice claim could also impact coverage.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080