Lawyers Professional Liability Insurance policies have exclusions for acting as a director or officer of an organization. Attorneys need to review their Lawyers Professional Liability policy when asked to sit on a board or act as an officer of an organization as it may jeopardize coverage. Your policy may just restrict coverage when you are acting in the capacity of an officer or director but will provide coverage for other activities that you do for the client. Yet another policy may have an outright ban not just for the attorney sitting on the board or being an officer, but for any work done by the firm. Even when another firm member does the work.
There may be an officer/director supplement requested by the insurer. Even without a supplement, it is a good idea to discuss this relationship with your agent. Disclosing the relationship prior to a claim is always better than at claim time. Make sure the policy form for your Lawyers Professional Liability Insurance will not restrict your coverage for this client. Although tough to get, an insurer may endorse coverage back for this relationship, but most will not. As almost every Lawyers Professional Liability Insurance policy has different wording for this exclusion, there can be another policy from another Professional Liability insurer that provides the needed coverage.
Further it is important that for any board that you sit on insist that there is a Directors & Officers policy in place. This is regardless of the organization being a charity, nonprofit or for-profit enterprise. Directors & Officers policies provide coverage not found on a Lawyers Professional Liability Insurance Policy.
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Lee Norcross, MBA, CPCU
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L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
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Lee@L2Ins.com
616-726-7080