While attorney malpractice insurance policies do not have standard wording, certain exclusions are almost universal. An firm’s attorney fees is a common exclusion. Attorney’s fees are not considered in the damages definition and are therefore excluded from coverage.
The attorney fees exclusion is normally not in the exclusion policy section. Frequently it is in the definition of “damages” or what is a “claim expense.” The ProAssurance Lawyer Care policy has the typical “exclusion” crafted in the definitions section of the policy:
“Claim expense(s) means all expenses incurred by or with the written consent of the Company in the investigation, adjustment, defense, or appeal of a claim, including but not limited to fees charged by a lawyer, mediator, or arbitrator; costs taxed against an Insured for a claim covered by this policy; interest on that part of any covered judgment that does not exceed the applicable limit of liability; and commercially reasonable premiums on appeal bonds, the principal amount of which shall not exceed the applicable limit of liability (but the Company shall have no obligation to apply for, guarantee, or furnish such bonds). Claim expenses do not include salaries and benefits of employees or officials of the Company, or supervisory counsel retained by the Company, nor the cost of providing a defense for grievance hearings or disciplinary proceedings of any kind.”
Still notify your insurer about the return of attorney’s fees only suit. An attorneys fee suit may be a precursor to a malpractice claim. Not notifying the insurer could allow the insurer to raise a “prior knowledge” claim denial of what could have been a covered attorney malpractice claim.
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Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
Lee@L2Ins.com
616-726-7080
