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.
Aspen American defines Professional Services as:
II. LIMITS OF LIABILITY AND DEDUCTIBLE
E. Supplementary Payments
5. Non-Profit Directors and Officers Coverage
The Company will reimburse the Insured up to a maximum of $10,000 per policy period for damages and claim expenses arising out of any Insured’s activities, while acting as a Director or Officer of a non-profit organization, as defined by the Internal Revenue Service, provided that such activities have been disclosed to the Company in the application or other written notification which has been accepted by the Company.
Coverage afforded shall be excess of all valid and collectible Directors and Officers Liability Insurance.
III. DEFINITIONS
N. Professional services means services performed by the Insured:
1. For a client in the Insured’s capacity as a lawyer in good standing, mediator, arbitrator, notary public, lobbyist or hearing officer:
2. As an administrator, conservator, executor, guardian, trustee, receiver, or in any similar fiduciary capacity; or as a title agent or legal expert provided that such services are performed in connection with, and incidental to, the Insured’s practice of law; provided, however, that no coverage shall apply to any claim made against the Insured as a beneficiary or distributee of any trust or estate;
3. As a member of a bar association or other legal or lawyer-related ethics, peer review, accreditation, licensing or similar board, committee, or organization;
4. As an author, but only for the publication or presentation of legal research papers or similar work and only if the fees generated annually from all such work are less than $25,000; and
5. On a pro bono basis performed with the knowledge and consent of the Named Insured.
IV. EXCLUSIONS
D. Based on or arising out of the Insured’s capacity as an officer, director, partner, manager, trustee, or employee of any company, corporation, operation, organization, or association other than the Named Insured or any predecessor firm; provided, however, that this exclusion does not apply to services performed as a trustee where such services are performed in connection with, and incidental to, the Insured’s practice of law or while acting as a Non-Profit Director or Officer as defined in Section II., E. 5. of this policy;
E. Based on or arising out of professional services performed for or by any business enterprise not named in Item 1. of the Declarations if, on or after the date or time of the act or omission giving rise to such claim:
1. Any Insured controlled, owned, operated, or managed or intended to control, own, operate, or manage such entity; or
2. Any Insured was, or intended to become, an owner, partner, member, director, officer, or employee of such entity.
Control of or ownership in a business enterprise is established if the Insured, or the Insured’s spouse or domestic partner, own or hold, individually or collectively, directly or indirectly, 20% or more of the equity and/or debt instruments of such enterprise;
J. Based upon or arising out of investment or financial advice or any product referrals even where such services are performed in connection with and are incidental to the Insured’s practice of law.
CLICK HERE TO OBTAIN AN ATTORNEY MALPRACTICE QUOTE
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