We cannot repeat this statement enough. There is no standard attorney malpractice policy. While the definitions wording is similar from policy to policy, minor policy wording differences can be the difference between having coverage or paying for the claim out of your own pocket.
For the firms that contract out or have staff working on a contract basis the Axis policy is a good example. The Axis policy’s definition of who is insured carves out a nonlawyer employee:
“You means the named insured and the persons or entities described below:
c. each nonlawyer employee who was, is, or becomes an employee of the named insured, but only while acting within the scope of employment on behalf of the named insured at the time of such employment.”
The insurer is interpreting this as staff must be a W2 employee to be covered by the policy. If you are a law firm that has all or part of your staff on a contract basis, this could be a big problem at claims time.
Many malpractice insurance policies do not carve out this coverage, but others do.
Read and understand your insurance policy. It is a contract. I am always amazed at attorneys that want a copy of their policy to read right about the time they are making a report of a claim.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080