Different FlavorsAttorney malpractice policies are not standardized.  There is no ISO attorney malpractice policy form.  Some law firms attempt to address the policy coverage differences by having an agent do a side by side policy comparison.   Unfortunately these comparisons are normally useless in finding a specific issue for a specific law firm’s practice.   This leaves insureds with additional due diligence needed when adding new clients, changing insurers or the insurer changes their policy form.  Everyone likes shorter new business and renewal applications.  But with this trend towards shorter and shorter legal malpractice applications providing less information for the agent and underwriter to address lurking policy exclusion differences.  A subtle policy language difference that might not affect one law firm’s coverage will exclude coverage for another law firm.


Case in point is a recent law firm query. Over the years the firm gravitated towards more work with government entities.  Years back when this firm was written there was no coverage issue.  Subsequent renewal applications provided little specific information about what government work actually entailed.  


The law firm’s morphing practice into more and more government work caused little concern as the old policy language did not exclude the law firm’s government work.  As with some law firms the renewal application was an afterthought.  Each year it was hard enough just getting the ‘minimal’ information needed to annually renew the coverage and to get it renewed on a timely basis.  Price was ‘King” and everyone was happy as long as the premium remained close to the year prior.


This changed when details of the law practice was compared to the new revised attorney malpractice insurance policy language.


Exclusion Section Old Policy:


“G. Any violation or breach by an Insured:


4. In the Insured's capacity as a public official or an employee or representative of a governmental body, subdivision or agency, unless the Insured is, by virtue of that position as a public official or employee or representative of such entity, rendering professional legal services to it.”



The updated policy language was an issue for this particular law firm.



Exclusion Section New Policy:


“7. Any violation or breach by an Insured:

d. In the Insureds capacity as a public official or an employee or representative of a governmental body, subdivision or agency.”


Paragraph heading was the same, but policy language different. This law firm on a contract basis represented a city as the city attorney.  While the old policy language did not cause a problem, the new language appeared to be problematic with this representation of the city as the city attorney.  Good news is there are no known claims or potential claims.  So the issue is very correctable.  With most insurers, there is an endorsement available to buyback this coverage.  An advantage or many times a disadvantage of a claims-made policy is that once the language is changed, the firm will now settle on the revised policy language for future made claims.  As a claims-made policy this language change appeared to eliminate coverage for any claims brought even if the claim might have been covered under the old language.  Once this endorsement is added to buy back the coverage the issue is address for both past and future acts.


The other option is to find another insurer with policy language that might better fit this insured’s practice.   Again with claims-made coverage once the new language is inforce, the firm will settle any new claim matters for past and present acts on the new policy language.


Alternative Insurer’s Exclusion Section Policy Language:

“2.     Any claim or request for Supplementary Payments based upon, arising out of, directly or indirectly resulting from or in consequence of, or in any way involving any of the following:


b. Any Insured’s services or capacity as a public official or employee of a governmental body, subdivision or agency, except however for a claim or disciplinary proceeding brought by a governmental agency, body or subdivision as a client of the Named Insured that is based upon or arises solely from the performance of legal services by an Insured to the governmental agency, body or subdivision, but only if such services are performed as a member of or on behalf of the Named Insured;”


The policy language is important.  Two policy exclusions with the same heading may have dramatically different impacts on whether there is insurance coverage once the policy language details are examined.   Look beyond the policy limits and premium to make sure your firm is properly covered.

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