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 General Star Insurance policy excludes certain client ownerships, management and/or directors/officer legal work from coverage.
IV. EXCLUSIONS
This Policy does not apply to any Claim made against the Insured based upon, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving:
I. any Insured’s capacity as a public official or an employee of a governmental body, subdivision or agency unless the Insured is deemed to be such solely because the Insured has rendered Professional Services to such governmental entity;
J. any business enterprise other than the Named Insured or a Predecessor Firm which is or was more than 15% owned by any Insured or an accumulation of Insureds, or in which any Insured is or was an officer, director, partner, manager, or employee, or which is or was directly or indirectly controlled, operated or managed by any Insured, other than solely in a fiduciary capacity;
This Exclusion applies whether or not the Insured’s activities also constitute or involve Professional Services.
III. DEFINITIONS
H. Insured means:
1. the Named Insured and any Predecessor Firm;
2. any individual or professional corporation who is or becomes a partner, principal, officer, director, stockholder, or employee of the Named Insured, but solely with respect to Professional Services performed on behalf of the Named Insured or Predecessor Firm;
3. any individual or professional corporation who was a partner, principal, officer, director, stockholder, or employee of the Named Insured or Predecessor Firm, but solely with respect to Professional Services performed on behalf of the Named Insured or Predecessor Firm;
4. any “of counsel” or independent contractor who is a natural person, but solely with respect to Professional Services performed on behalf of the Named Insured or Predecessor Firm and pursuant to a written contract with the Named Insured or Predecessor Firm; or
5. the heirs, executors, administrators, and legal representatives of any Insured in the event of death, incapacity or bankruptcy, and the lawful spouse or a person qualifying under applicable law as a domestic partner of such Insured, but solely with respect to Professional Services rendered by the Insured prior to such Insured’s death, incapacity or bankruptcy and only to the extent that such Insured would otherwise be covered by this Policy.
I. Insurer means the insurance company shown in the Declarations.
J. Named Insured means the person or entity shown in Item 1 of the Declarations.
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