The assumption that your attorney malpractice policy will not answer in case of a criminal complaint could be invalid. A recent New Jersey court case was cited in Professional Liability Matters by Seth L. Laver, Andrew P. Carroll and Steven C. Capobianco of Goldberg & Segalla makes the point that assuming what your attorney malpractice insurance coverage is or is not can cost you money. The New Jersey court ruled that the law firm’s malpractice insurer must provide a defense. Generally the assumption by most is that an insurance policy will not provide coverage for criminal acts.
As an example of not making coverage assumptions is ‘exclusion section IV’ of the current Wesco Insurance Company Lawyers Professional Liability Insurance policy which reads:
A. to any claim based on or arising out of any dishonest, fraudulent, criminal or malicious act or omission by an Insured, however, the Company shall provide the Insured with a defense of any claim based on or arising out of any dishonest, fraudulent or malicious act or omission by an Insured until the dishonest, fraudulent or malicious act or omission has been determined by adjudication, including regulatory ruling against or admission by such Insured; but providing such a defense will not waive any of the Company’s rights under this Policy;
This is just one example where assuming what is in an attorney malpractice policy can cost you money. Also, surprisingly, coverage is found in the ‘Exclusion’ section of the policy for defense of criminal acts.
Another common misconception in an attorney malpractice insurance policy is that there is no coverage for bar complaints. While it is true that the most attorney malpractice policies will not provide an indemnity payment for a bar complaint, many do provide defense coverage up to a certain limit with no deductible.
Anytime that you have an attorney malpractice matter or potential claim a through reading of your policy is the 1st place to start. Don't forget that an experienced malpractice insurance agent can help guide you in making sure that the matter is reported promptly to the insurer plus is a good resource to help you determine what is contained in your insurance policy.
The Professional Liability Matters Article can be read by clicking: Alleged Crimes Are Not Covered, Right?