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.
Freedom Specialty defines Professional Services as:
I, INSURING AGREEMENT
C. Coverage Extensions
7. Not for Profit Directorships Coverage
Subject to the deductible as set forth in the Declarations, we will reimburse you up to $15,000 per claim/$30,000 per policy period for legal liability arising out of your activities as a Director or Officer of a not-for-profit organization, provided that such activities have been previously disclosed to us in the application for coverage or in some other written form accepted by us. Coverage shall be excess and follow-form of all valid and collectible Directors’ and Officers’ Liability Insurance, which has been issued to such not-for-profit organization and any indemnification provided by such not-for-profit organization.
IV. DEFINITIONS
F. Controlling interest means the right, directly, or indirectly, to (a) vote thirty percent (30%) or more of the issued and outstanding voting stock in an incorporated entity, (b) elect thirty percent (30%) or more of the directors of an incorporated entity, (c) receive thirty percent (30%) or more of the profits of an unincorporated entity, or (d) have the position of general partner of a limited partnership, managing general partner of a general partnership, or comparable position in any other business enterprise.
G. Covered act means an act, error, or omission, including breach of contract or duty, breach of fiduciary duty or personal injury arising from professional services performed by any of you. Covered act includes a privacy covered act and network security covered act.
O. Fiduciary, except in EXCLUSION V.D., means you in your capacity as an administrator, conservator, executor, guardian, committee of an incompetent, trustee, receiver, escrow agent, including appointed by a court of law, or any similar capacity but only in the course of rendering or failure to render professional services for others.
Z. Professional services means legal and consulting services and activities performed by you for others provided that the remuneration for such services or advice, or a portion thereof, inures to your benefit:
- performed as a lawyer, notary public, arbitrator, mediator, title insurance agent, designated issuing lawyer to a title insurance company, fiduciary, speaker or author of legal treatises;
- provided by a lawyer in connection with any bar association, its governing board, or any of its committees;
- the publication or presentation of research papers or similar materials by you;
- provided in connection with pro bono representation; or
- provided by your employee in connection with assisting a lawyer to perform the activities described in 1., 2., 3. and 4. above for others on the behalf of you.
V. EXCLUSIONS
D. alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of, or in any way involving activities performed by you as a fiduciary under the Employee Retirement Income Security Act of 1974, its amendments, or any regulations or orders promulgated pursuant thereto unless you are a fiduciary solely due to professional services rendered to clients;
E. alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of, or in any way involving a covered act committed by you in connection with any business enterprise which is not the named insured if, at the time of such covered act any of you, had a controlling interest in such business enterprise. This exclusion applies whether or not a lawyer-client relationship existed;
F. alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of, or in any way involving the activities performed by you as a public official or as an employee of a governmental body, subdivision, or agency thereof, unless you are employed solely to render professional services and the remuneration for the professional services is paid to you;
K. alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of, or in any way involving of notarized certification or acknowledgment of a signature without the physical appearance before such notary public;
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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