Claim time is not the time to find out the attorney has no malpractice coverage for the reported claim. Attorneys that do work for clients where the attorney is involved with client management or ownership may run afoul of attorney malpractice policy exclusions. As no two client relationships are the same and no two policies are alike, where an attorney is doing legal for clients with an ownership or management role it is wise to read the entire policy. Where one malpractice insurance policy may provide coverage, the same client relationship with another malpractice policy excludes coverage. Depending on the attorney’s attorney/client relationship(s) there may be no coverage provided by the attorney malpractice policy.
The Florida Lawyers Mutual Insurance (FLMIC) policy excludes certain client ownerships, management and/or directors/officer legal work from coverage.
V. EXCLUSIONS
A. THE POLICY DOES NOT AFFORD ANY COVERAGE OR BENEFITS WITH RESPECT TO:
3. Any Claim made against any business enterprise not named in the Declarations:
a. Owned in whole or in part by an Insured; or
b. Which is controlled, operated or managed in whole or in part by an Insured, individually, or in a fiduciary capacity; including the ownership, maintenance or use of any property.
4. Any Claim arising out of an Insured’s non-professional services, or capacity as:
a. An officer, director, committee member, advisory board member, partner, trustee, or employee on behalf of or in the business of a charitable organization, pension, welfare, profit sharing, mutual or investment fund or trust, or business enterprise of any other description that is not expressly named in the Declarations.
b. A public official or employee of a governmental body, subdivision or agency.
c. A fiduciary under the Employee Retirement Income Security Act of 1974 and its amendments or any regulation or order issued relating to that Act except if an Insured is deemed to be a fiduciary solely by reason of legal advice given with respect to any employee benefit plan.
I. DEFINITIONS
9. “Insured” means any person or organization qualifying as an Insured herein under Section III. A. WHO IS AN INSURED.
10. “Named Insured” means the individual, firm or professional legal business entity named on the Declarations as Named Insured.
III. INSUREDS
A. WHO IS AN INSURED
Each of the following is an Insured to the extent set forth below:
1. The Named Insured as identified in the Declarations.
a. If the Named Insured is an individual, then only with respect to acts, errors or omissions in Professional Services in the law practice f that individual.
b. If the Named Insured is a professional legal business entity, then any lawyer, partner, officer, director, shareholder, or member of the Named Insured, but only with respect to acts, errors or omissions in Professional Services in the law practice of the Named Insured.
2. Any non-lawyer employee of the Named Insured, but only with respect to acts, errors or omissions in Professional Services in the law practice of the Named Insured.
3. Any lawyer serving as “of counsel” to the Named Insured but only with respect to acts, errors or omissions in Professional Services in the law practice of the Named Insured.
4. Any lawyer who was a partner, officer, director, shareholder, member or employee of or “of counsel” to the Named Insured or Predecessor Firm at the time the acts, errors or omissions on which liability is asserted occurred but only with respect to acts, errors or omissions in Professional Services in the law practice of the Named Insured or Predecessor Firm as a partner, officer, director, shareholder, member or employee of or “of counsel” to the Named Insured or Predecessor Firm.
No coverage is provided under the Policy for any partner, officer, director, shareholder, member, employee or “of counsel” for acts, errors or omissions occurring before joining the Named Insured, unless coverage for prior Incidents is purchased and the appropriate Retroactive Date is shown.
The Named Insured will be deemed the agent of all Insureds in regard to all matters relating to the Policy.
Affected insured attorneys should not solely rely on the information provided in this blog. As facts may differ, determining malpractice coverage for each attorney client relationship requires a complete review of the malpractice policy. The facts that cause an alleged malpractice claim could also impact coverage.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080