Attorney Malpractice Insurance policies exclude coverage for attorneys acting as a director or officer of a client organization. Attorneys need to be careful when asked to sit on a client’s board or become an officer of a client organization not to jeopardize malpractice coverage. Policy coverage restrictions range from acting in the capacity of an officer or director but will provide coverage for other activities that you do for the client. To policies that have an outright ban not just for the attorney that sits on the board or is an officer, but for any other work done by the firm.
Attorney malpractice insurance directors/office exclusions do not have standard wording. It is important to check as based on the wording one insurer may provide coverage where another does not. The officer/director supplement discloses your relationship to the client. But even if not disclosed on the application discuss this relationship with your agent. Make sure your attorney malpractice policy form does not restrict your coverage for your client representation. Although tough to get, insurers may endorse coverage back on for this relationship.
Do not rely on your attorney malpractice policy to provide directors and officers coverage., if asked to sit on a board insist that the entity has a Directors & Officers policy in place. This is regardless of the organization being a charity, nonprofit or for profit enterprise. Directors & Officers policies provide coverage for covered acts exposures outside the scope of your attorney malpractice insurance policy.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080