There appears to be many mistaken beliefs about what is and is not covered when a firm has an of counsel attorney working for them. And believing something is covered versus being covered are two different things.
Of Counsel doing no work for the law firm
We continue to come across law firms’ lawyers professional liability insurance policies that have of counsels listed that do no work for the firm. When this relationship is queried further the expectation is that all work done by the of counsel attorney is covered under the law firm’s attorney malpractice policy.
The reality could not be further from the truth. An of counsel attorney that does no work for the law firm has no coverage under the law firm’s attorney malpractice policy. Even if the of counsel attorney is listed on the attorney schedule for the firm, there is still no coverage. The of counsel attorney needs to purchase their own lawyers professional liability insurance policy.
There might be a variety of reasons that the firm wants to list the of counsel on the firm’s letterhead, but just listing the of counsel attorney on the letterhead can open the law firm up to vicarious liability from the of counsel actions. Likely the allegations against the firm for the of counsel’s acts will get tossed. But it still could push up the law firm’s malpractice insurance premiums.
Of counsel does some work for the law firm
In this case the law firm has attorney malpractice coverage for the covered work that the of counsel does for the firm. The malpractice carrier may or may not even ask for the name of the of counsel attorney. Just remember that only the covered work done on behalf of the named insured firm is covered. Depending on the number of hours the of counsel provides services for the firm and the insurance carrier, will determine whether they are charged on the attorney malpractice policy.
The of counsel attorney needs to have their own attorney malpractice coverage for any work that is not done on behalf of the named insured firm. As a side light, the of counsel attorney malpractice policy does not provide coverage for the law firm.
Of counsel does all of their work for the law firm
The of counsel’s covered work is covered by the firm’s attorney malpractice insurance policy. The law firm needs to make sure they have disclosed the relationship of the of counsel to their malpractice carrier. Depending on the number of hours worked and the insurance carrier, will determine if there is any charge for the attorney.
We have also come across many law firm’s that “require” the of counsel to have their own malpractice coverage. Although some insurance carrier’s will write an attorney malpractice policy for the of counsel malpractice coverage, it is of limited value. The law firm still has no coverage under the of counsel’s coverage, nor will an insurance carrier name the law firm as an additional insured on the of counsel policy.
Even if the law firm mistakenly expects coverage from the of counsel’s attorney malpractice policy, the firm needs to remember that all attorney malpractice policies sold in the United States are claims made coverage forms. If the of counsel and the law firm part company at a later date and the of counsel decides at a later date to end their attorney malpractice policy without purchasing an extended prior acts endorsement(ERP), the law firm’s mistaken expectation of coverage ends when the coverage ends.
Other Of Counsel limitations of coverage
Normally the of counsel cannot purchase an ERP under the firm’s attorney malpractice policy. Or qualify for a non-practicing ERP. Coverage for the of counsel is limited to work done on behalf of the named insured firm. If the of counsel has any work they do for another firm (including their own), they need to have a separate policy to cover that work.
Note: The above is general information about a Claims Made Insurance policy concept. Different insurance policies and different situations may or may not treat these concepts in a similar manner.