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 Legal Services (professional services) definition against the services that your law firm provides.
US Specialty defines Legal Services as:
IV. DEFINITIONS
(J) Legal Services
“Legal Services” shall mean:
(1) those services, including eleemosynary (pro bono) services, performed by an Insured for others as a lawyer, arbiter, mediator, title agent or other neutral fact finder or as a notary public. Any title agency or company, on whose behalf an Insured acts as title agent or designated issuing attorney shall not be considered an Insured under this Policy;
(2) those services performed by an Insured as an administrator, conservator, receiver, executor, guardian, trustee or in any other fiduciary capacity and any investment advice given in connection with such services;
(3) those services performed by an Insured in the capacity as a member, director or officer of a bar association, ethics, peer review or similar professional board or committee; and
(4) those services as an author or publisher of legal research papers or legal materials or the presenter of legal seminars or materials, but only where such services are performed without compensation or compensation attributable per publication, presentation or seminar is less than USD25,000.
V. EXCLUSIONS
This Policy does not apply to any Claim, Claim Expenses, Notification Expenses or Loss:
(B) based upon or arising out of an Insured’s capacity as:
(1) a former, existing or prospective officer, director, shareholder, partner or member, or manager of a business enterprise or charitable organization unless such enterprise or organization is named in the Declarations of this Policy;
(2) a former, existing or prospective officer, director, shareholder, partner, manager, or trustee of a fund or trust which is a pension, welfare, profit-sharing, mutual or investment fund or investment trust; or
(3) a fiduciary under the Employee Retirement Income Security Act of 1974 and its amendments or any regulation or order issued pursuant thereto or any other similar state or local law.
Notwithstanding the foregoing, this Exclusion shall not apply to a Claim based upon or arising out of an Insured’s capacity as a member, director, or officer of any professional legal association, its governing board or any of its committees.
(C) based upon or arising out of an Insured’s capacity as a public official or an employee or representative of a governmental body, subdivision or agency unless that Insured is deemed, as a matter of law, to be a public official or employee or representative of such entity solely by virtue of rendering Legal Services to such entity.
(E) by or on behalf of any:
(1) Insured, unless such Claim arises out of Legal Services rendered to an Insured as a client;
(2) entity in which any Insured collectively owns a twenty-five (25%) or greater financial interest;
(3) entity in which any Insured is an officer, director, partner, principal, or an employee; or
(4) entity that is or was operated, managed or controlled by any Insured.
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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