Attorneys wear many hats. Attorney malpractice insurance provides coverage for most hats but not all. A malpractice insurer’s definition(s) of professional services may cause coverage issues for attorneys that perform certain client services. If the services are provided using a license other than a law license, it is a good bet that it is not covered. When looking for the appropriate insurer, check the professional services definition against the services that your law firm provides.
Lawyers Mutual Insurance Company (LMIC) defines Professional Services as:
ARTICLE 1.
The Definitions
1.25 “Professional Services” means:
(a) legal services for a client as a Lawyer;
(b) legal services for a client as an administrator, conservator, receiver, executor, guardian, or trustee of an express trust;
(c) services as an arbitrator, mediator, judge pro tem, discovery referee, or a notary public; or
(d) services as an expert witness regarding legal issues.
ARTICLE 3.
The Exclusions
THIS POLICY DOES NOT APPLY:
3.5 To any Claim based on liability under the Securities Act of 1933, the Securities Exchange Act of 1934, the Public Utility Holding Company Act of 1935, the Trust Indenture Act of 1939, the Investment Advisors Act of 1940, the Investment Company Act of 1940, as any of the foregoing are or become amended, or any similar federal or state law, or any rules of regulations promulgated thereunder, to the extent Damages for any such Claim or for all such Claims in the aggregate are in excess of $50,000.
3.6 To any Claim made against or by any business enterprise (other than the Named Insured or Predecessor Firm), any not-for profit organization, or any plan, fund or trust in which an Insured or Related Individual is or was a director, officer, employee, trustee, administrator, partner, manager or with respect to which an Insured or Related Individual has or had any ownership interest (whether through ownership of stock, partnership shares or otherwise), other than a beneficial ownership of securities of a class registered under Section 12 of the Securities Exchange Act of 1934 or exempted from registration by Section 12(g)(2)(A) thereof, if, taking into account the beneficial ownership interest of each and every Insured and the beneficial ownership interest of their respective Related Individuals as a group, such group does not beneficially own more than 1% of the outstanding securities of such class.
3.7 To any Claim arising out of or relating to an Insured’s services and/or capacity as:
(a) an officer, director, partner, trustee, or employee of a business enterprise (other than the Named Insured or Predecessor Firm) or not-for profit organization or any plan, fund or trust;
(b) a public official, or an employee of a governmental body, subdivision, or agency;
(c) a fiduciary under the Employee Retirement Income Security Act of 1974 and its amendments or any regulation or order issued pursuant thereto, except if the Insured is deemed to be a fiduciary solely by reason of legal advice rendered with respect to an employee benefit plan; or
(d) a securities or commodities broker or dealer, investment advisor, accountant, real estate broker, real estate agent, business manager, personal manager, entertainment agent, literary agent, sports agent, insurance agent or escrow holder, or any similar services or capacities.
3.20 To any Claim arising out of or relating to an Insured’s role, capacity or affiliation as shareholder, partner or member of any law firm, or with any lawyer, other than the Named Insured or a Predecessor Firm.
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This blog is an excerpt from the policy. The complete policy along with applicable endorsements could impact the information provided above.
Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080