Attorney malpractice insurance policies are meant to insure the attorney’s practice of law. Insurers do not consider giving clients investment advice practicing law. Not all insurers have this exclusion. But if the attorney is giving investment advice there should be a careful reading of the policy. There are two places to determine whether there might be coverage for investment advice.
The policy exclusion section might have a statement such as:
“any claim involving the rendering of or failure to render investment advice;”
The current ProAssurance policy goes on to define investment advice:
“Investment advice means giving advice regarding the value of an investment; or recommending investment in, purchase of, or sale of a particular investment; or managing any investment; or buying or selling any investment for another; or acting as a broker for a borrower or lender; or performing economic analysis of any investment; or inducing others to make a particular investment; or giving advice where the compensation for such advice is contingent upon the performance of a particular investment.”
The definition of professional services may lack including investment advice. If so, it is another clue that there is not coverage for investment advice
The ProAssurance policy definition section defines professional services as:
“Professional services means services rendered by an Insured as a provider of legal services in a lawyer-client relationship. Professional services shall also include activities of an Insured as a mediator, arbitrator, title insurance agent, notary public, administrator, conservator, receiver, executor, guardian, or trustee, or in any similar fiduciary capacity, or as a member of a formal accreditation, ethics, peer review, licensing, standards review, bar association, or similar professional board or committee, or as an author, publisher, or presenter of legal research.”
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Lee Norcross, MBA, CPCU
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