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 ProAssurance Insurance policy excludes certain client ownerships, management and/or directors/officer legal work from coverage.
SECTION 4. EXCLUSIONS
4.1. WHAT THIS POLICY DOES NOT INSURE
This policy does not apply to:
b) any claim made by or against any entity not named in the Declarations (1) in which any Insured is or was a ten percent (10%) or more owner, partner, member, principal, or stockholder; or in which any Insured is or was an employee; or that is or was directly or indirectly controlled, operated, or managed by any Insured; or (2) arising out of the provision of, or failure to provide, professional services to such entity by an Insured;
c) any claim made against any Insured involving any Insured’s (1) activities or status as an owner, partner, officer, director, member, principal, stockholder, employee, or independent contractor of an entity (other than a prior law firm) not named in the Declarations, or (2) arising out of the provision, or failure to provide, professional services to such entity by an Insured;
d) any claim involving any Insured’s activities as a public official or employee of a governmental body, subdivision, or agency, except that this exclusion does not apply to any Insured who rendered professional services to a governmental body, subdivision, or agency solely in the capacity of retained outside counsel;
SECTION 1. DEFINITIONS
Insured means (1) the Named Insured; or (2) any Predecessor Firm; or (3) any lawyer who is a partner, limited liability partner, limited liability company member, officer, director, stockholder, employee, or independent contractor of the Named Insured, solely while acting in a professional capacity on behalf of the Named Insured or any Predecessor Firm; or (4) any lawyer who was a partner, limited liability partner, limited liability company member, officer, director, stockholder, employee, or independent contractor of the Named Insured or any Predecessor Firm, solely while acting in a professional capacity on behalf of the Named Insured or any Predecessor Firm; or (5) any non-lawyer who was or is an employee of the Named Insured or any Predecessor Firm, solely while acting within the scope of their employment on behalf of the Named Insured or any Predecessor Firm; or (6) any past or present “of counsel” lawyer, solely while acting in a professional capacity on behalf of the Named Insured or any Predecessor Firm; or (7) the heirs, assigns, and legal representatives of an Insured in the event of the Insured’s death, incapacity, or bankruptcy, to the extent that the Insured would have been covered.
Predecessor Firm means any law firm engaged solely in the private practice of law that has been dissolved or ceased the practice of law as of the date the Named Insured was created and from which 50% or more of the attorneys join the Named Insured.
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