Employed Lawyer Malpractice Insurance Policy

July 11, 2023

Catus in Desert at Zion National Park

Private practice attorneys may do work for clients where the attorney is involved with client management or ownership may run afoul of attorney malpractice policy exclusions. Depending on the attorney’s attorney/client relationship(s) there may be no coverage provided by an attorney malpractice policy.

As an example the AIG (National Union) policy excludes certain client ownerships, management and/or directors/officer legal work from coverage.

V. EXCLUSIONS

 

This policy does not apply:

 

2.         Certain Services and Capacities.

 

To any claim against you in your capacity as:

 

a.     an officer, director, partner, manager, operator, or employee of an organization other than that of the named insured;

b.     a public official, or an employee of a governmental body, subdivision, or agency; or

c.     a fiduciary under the Employee Retirement Income Security Act of 1974 and its amendments thereto, or similar federal, state, local or common law, or any regulation or order issued pursuant thereto, except if you are deemed to be a fiduciary solely by reason of legal advice rendered with respect to an employee benefit plan.

 

3.         Equity Interests.

 

If a person insured under this policy owns alone or together with his or her spouse or Domestic Partner, ten percent (10%) or more of the issued and outstanding shares, units or other portions of the capital of an organization, and that person simultaneously provides professional legal services with respect to such an organization, this policy will provide no coverage to that person for any claims based upon or arising out of such professional legal services.

 

If the collective equity interest of:

 

a.     all persons and entities insured under this policy;

b.     spouses of persons insured under this policy; and

c.     the named insured

 

is thirty-five percent (35%) or more of the issued and outstanding shares, units or other portions of the capital of an organization, and any person insured simultaneously provides professional legal services with respect to such an organization, this policy will provide no coverage to any person insured or to the named insured for any claims that result there from.

 

An Employed Lawyer Policy may be the answer to this coverage conundrum. An Employed Lawyer Policy provides coverage for lawyers that are employed and/or may have an ownership interest in a client. This policy is written on behalf of the client company that “employs” the attorney. Depending on the Employed Lawyer Insurer, this policy may provide coverage for “moonlighting” done by the attorney where other legal work is it is not a major portion of their time. In certain situation the attorney will need to have a separate attorney malpractice policy for their other private practice clients.

If an attorney is doing work for multiple clients where that are ownership or management exclusion issues the attorney will need one policy for each client company. Prior acts from an attorney malpractice policy are not covered by an Employed Lawyer Policy. Nor will an Employed Lawyer prior acts be covered by an attorney malpractice policy.

To get an Employed Lawyer quote

 CLICK HERE

 

Lee

 
 
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   Lee Norcross, MBA, CPCU, CPIA
   California License # 0D87292
    L Squared Insurance Agency, LLC ® DBA in California as
   L2 L Squared Insurance Agency, License # 0L93416

    Managing Director, CEO
   

     (616) 940-1101 Ext. 7080

 

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