More than a few attorneys forget to take advantage of Disciplinary Coverage until it is too late. Attorney Malpractice Insurance policies that offer this coverage can be ‘Duty to Defend’ or ‘Reimbursement’. Even though the Twin City Insurance malpractice coverage is ‘Duty to Defend’, the disciplinary coverage is ‘Reimbursement’. Policy wording for disciplinary coverage and reporting differs by carrier. The disciplinary coverage is not subject to the policy deductible.
Policy Coverage:
SECTION II: COVERAGE EXTENSIONS
C. DISCIPLINARY OR REGULATORY PROCEEDING COVERAGE
We shall pay reasonable and necessary fees, costs and expenses (but not damages or sanctions) incurred by an insured resulting from the defense of a proceeding by a regulatory or disciplinary official or agency first initiated and reported to us during the policy period to investigate a charge of professional misconduct in the rendering of or failure to render professional legal services subject to a limit of $50,000 for each insured and subject to a maximum limit of $100,000 per policy period. No deductible amount shall apply to this coverage extension nor shall expenses paid under this coverage extension serve to reduce the limit of liability. This coverage is also subject to any exclusions of the policy and coverage defenses which might apply with respect to claims. In order to receive coverage under this provision, you must give us written notice prior to the end of the policy period and no later than thirty (30) days of receipt of any disciplinary allegation made against any insured.
Definitions:
6. Professional legal services means services performed or advice given by you or on your behalf, including pro-bono services performed with the written consent of the named insured, for others in the conduct of your practice as a:
a. Lawyer;
b. Real estate title insurance agent;
c. Notary public;
d. Arbitrator;
e. Mediator;
f. Lobbyist;
g. Member, director, or officer of any attorneys’ bar association, its governing board or any of its committees; or
h. Administrator, conservator, executor, guardian, trustee, receiver, or any similar fiduciary capacity.
Professional legal services includes the publication or presentation of research papers or similar materials by an insured, but only if the fees generated from such work are not greater than five thousand dollars ($5,000).
Professional legal services does not include services performed or advice given while acting in the capacity of an employee, officer, director, partner, shareholder, principal, investor, member, agent or in any other capacity that gives rise to a conflict of interest of any organization other than the named insured or any predecessor firm(s).
Not taking advantage of this policy coverage does not make sense. Firms have a fear that reporting disciplinary complaints can impact their attorney malpractice insurance premiums. While too many disciplinary reported complaints that do not result in an issue can cause problems. Not reporting issues that may lead to a proceeding may impact your malpractice insurance should the same issue turn into a malpractice claim at a later date. The other issue is that once a year you may need to attest on the renewal application about disciplinary issues.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080