Attorney Malpractice Insurance Policy Definitions – Damages
There is no standardized attorney malpractice policy also called a lawyers professional liability policy (LPL). When shopping for a cheaper premium make sure the coverage meets your needs.
People may have their own opinion on what the policy covers. Opinions are not fact. Each policy may have unique meanings for certain terms. This is especially true when it comes to Damages definition. What matters is the terms definition in your policy. Case in point is Corepoint’s Damages definition.
E. “Damages” means judgments, awards and settlements if negotiated with the assistance and approval of the Company. Damages do not include:
- Legal fees, costs and expenses paid to or incurred or charged by the Insured, whether or not claimed as restitution of specific funds, forfeiture, financial loss, set-off or otherwise, and injuries that are a consequence of any of the foregoing:
- Any conversion, misappropriation, improper comingling or negligent supervision by any person of client or trust account funds or property or funds of any other person held or controlled by an Insured in any capacity or under any authority, including any loss or reduction in value of such funds or property;
- civil or criminal fines, sanctions, penalties or forfeitures, whether pursuant to federal, state or local law, statute, regulation or court rule and injuries that are a consequence of any of the foregoing;
- punitive or exemplary amounts and any multiplied portion of multiplied awards;
- any form of non-monetary relief;
- amounts for which the Insured is not financially liable or that are without legal recourse to the Insured;
- matters deemed uninsurable by operation of law.
This typical Damages definition not only defines coverage but the exclusions. More than one attorney is surprised after the fact to find out the court order sanctions, and attorney’s fees are excluded from coverage. Very few if any insurers actually provide coverage for this.
Each insurer walks back coverages. Policy exclusions are important to check. For instance firms doing securities work may find their insurance policy excludes coverage for this. In other instances closely held clients may have coverage with one insurance policy only to have a coverage exclusion in another policy.
Don’t find out after a reported claim that there is no coverage.
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Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
Lee@L2Ins.com
616-726-7080
