The Alaskan case of ALPS v Ingaldson Fitzgerald PC is an example of the courts refusing to force an insurer to cover attorney’s fees.
Awarded attorney’s fees normally are not covered under an attorney malpractice insurance policy. Associated damages such as civil or criminal fines, sanctions, or penalties ordered by a court or other administrative body are also usually not covered. Depending on the insurer’s legal malpractice insurance policy language look for this exclusion in 1 of 3 places; the insuring agreement, the definition section where damages or claims are defined or in the exclusion section of the policy.
In addition, demands for return of attorney’s fees by a client are not covered.
Fees can be a significant exposure to an attorney as attorney’s fees being awarded by the court to the other party can amount to millions of dollars.
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Lee Norcross, MBA, CPCU
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