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.
Twin City defines Professional Legal Services as:
SECTION I: SCOPE OF COVERAGE
B. DEFINITIONS
16. Professional legal services means services performed or advice given by you or on your behalf, including pro-bono services performed with the written consent of the named insured, for others in the conduct of your practice as a:
a. Lawyer;
b. Real estate title insurance agent;
c. Notary public;
d. Arbitrator;
e. Mediator;
f. Lobbyist;
g. Member, director, or officer of any attorneys’ bar association, its governing board or any of its committees; or
h. Administrator, conservator, executor, guardian, trustee, receiver, or any similar fiduciary capacity.
Professional legal services includes the publication or presentation of research papers or similar materials by an insured, but only if the fees generated from such work are not greater than five thousand dollars ($5,000).
Professional legal services does not include services performed or advice given while acting in the capacity of an employee, officer, director, partner, shareholder, principal, investor, member, agent or in any other capacity that gives rise to a conflict of interest of any organization other than the named insured or any predecessor firm(s).
SECTION III: EXCLUSIONS
EXCLUSIONS
This insurance does not apply to claims:
6. Arising out of an insured’s activities and/or capacity as a fiduciary under The Employee Retirement Income Security Act of 1974 as amended, or similar responsibility under state statutory or common law, except if the insured is deemed to be a fiduciary solely by reason of professional legal services rendered with respect to any employee benefit plan.
7. Arising out of an insured‘s capacity as a public official or employee of a governmental body, subdivision or agency thereof unless the insured is deemed to be such solely by virtue of rendering professional legal services to such governmental body, the remuneration for which services inures to your benefit; or
8. Made by or on behalf of:
a. A non-profit entity or any of its affiliates or subsidiaries;
b. An attorneys’ bar association; or
c. directors, officers or trustees of a non-Profit Entity or an attorneys’ bar association;
in any insured’s rendering of, or failure to render, non-profit services, provided that this exclusion will not apply if the claim is made and continued by or on behalf of such non-profit entity or attorneys’ bar association without the solicitation, assistance, active participation or intervention of such non-profit entity or attorneys’ bar association or their respective directors, officers or trustees.
10. Arising out of:
a. The promotion, sale or solicitation for sale of securities, real estate, investments or other assets by any insured; or
b. Recommendations, representations, or opinions concerning investment advice by an insured or any person or organization referred to by an insured for investment advice; or the performance or nonperformance of securities, real estate, investments, or other assets.
11. Arising out of professional legal services performed for or on behalf of any organization other than you or a predecessor firm if, at any time when those services were performed, the organization was or was intended to be:
a. Directly or indirectly controlled, operated or managed by an insured; or
b. Owned by an insured, or by a spouse of any insured, in a percentage which exceeds:
i. five percent of the issued and outstanding voting stock of the shares of a publicly traded organization; or
ii. ten percent of the shares of a closely or privately held organization.
14. Arising out of any alleged conversion, misappropriation, commingling, or improper use of money or funds held for others.
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