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Home > Blog > Attorney’s Fees are not Defined as Damages in Attorney Malpractice Insurance Policy
TUESDAY, OCTOBER 20, 2020

Attorney’s Fees are not Defined as Damages in Attorney Malpractice Insurance Policy

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There is no Acord standard policy wording for an Attorney Malpractice Insurance Policy.  With that said a common exclusion is for awarded attorney’s fees.  Attorney’s fees can run in the hundreds of thousands of dollars which can be a significant surprise if the firm is not aware of this policy exclusion.  More than one firm has become very angry when coverage is declined for this.  Normally attorney’s fees are carved out of the policy wording definition for damages.

Even though there is likely no coverage for attorney’s fees you will not find this exclusion in the exclusion section of the policy.   Frequently you will find this in the definition of ‘damages’ or what is a ‘claim expense’.  The Medmarc Lawyers Professional Liability Policy is typical of how the ‘exclusion’ is crafted and found in the definitions section of the policy:

“Damages means monetary judgments, awards, or settlements, but does not include (a) the return or restitution of legal fees, costs, and expenses charged by the Insured; (b) any client funds allegedly misappropriated, whether by an Insured or any other person, and whether intentionally or not, or interest thereon; or (c) fines, sanctions, penalties, punitive damages, exemplary damages, or any award resulting from the multiplication of compensatory damages, imposed against any Insured, any client of an Insured, or any other person or entity.”

 

Even though attorney’s fees may not be covered, it is important to put your insurer on notice as the allegations could go beyond just attorney’s fees.  You do not want your legal malpractice insurer stating that you had ‘prior knowledge’ of circumstances leading up to a claim and using this for a basis for denying a malpractice claim at a later date.

Lee

 
 
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   Lee Norcross, MBA, CPCU

    Managing Director, CEO
    Click here to contact Lee Norcross, MBA, CPCU

     (616) 940-1101 Ext. 7080

 
Posted 2:35 PM

Tags: attorney malpractice, no coverage for fee suits
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