Attorneys wear many hats. Attorney malpractice insurance provides coverage for most hats but not all. A malpractice insurer’s definition(s) of professional services may cause coverage issues for attorneys that perform certain client services. If the services are provided using a license other than a law license, it is a good bet that it is not covered. When looking for the appropriate insurer, check the professional services definition against the services that your law firm provides.
American Alternative defines Professional Services as:
W. PROFESSIONAL SERVICES means activities and services performed (including Pro Bono services) exclusively for others in the following capacities, provided that Professional Services does not include any services as an investment manager, broker, dealer, business manager, accountant, or real estate agent or broker:
1. Lawyer, arbitrator, mediator, other neutral fact-finder, lobbyist, notary public, Debt Collector, title agent or designated issuing lawyer to a title insurance company; provided there is no coverage under this policy for any title agency, title insurance company or any other similar entity unless specifically added by endorsement;
2. Member, director or officer of any bar association, ethics, peer review, formal accreditation or licensing body, or similar professional board or committee;
3. Administrator, conservator, receiver, executor, guardian, trustee, or any other similar fiduciary capacity;
4. Author or presenter of legal research articles or papers, legal seminars or related materials, but only if the total fees or remuneration generated from such activity does not exceed $25,000;
but only while performing Professional Services on behalf of the Named Insured or a Predecessor Firm.
However, regardless of any other provision, the following services and capacities are not Professional Services:
All other terms and conditions of the Policy remain unchanged.
NOTARY PUBLIC SERVICES INVOLVING CERTIFICATION WITHOUT ACCEPTABLE PROOF OF IDENTITY OF THE PERSON WHO IS OR IS CLAIMING TO BE THE PERSON SIGNING THE DOCUMENT OR INSTRUMENT IN QUESTION, WHICH MUST INCLUDE EITHER THE PHYSICAL APPEARANCE OF SUCH PERSON OR PERSONS, OR WHERE PERMITTED BY APPLICABLE LAW, A VIRTUAL APPEARANCE VIA REMOTE WEBCAM OR OTHER LEGALLY PERMISSIBLE ELECTRONIC OR VIRTUAL MEANS. EXCLUSION M. NOTARY CERTIFICATION OF SECTION IV. EXCLUSIONS OF THE POLICY IS HEREBY DELETED.
DEBT COLLECTOR means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts for a third party, or who regularly collects or attempts to collect, directly or indirectly, debts due another.
C. CERTAIN CAPACITIES: This Policy does not apply to any Claim alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of, or in any way involving any Insured’s status or capacity as:
1. A past, current or potential future officer, director, shareholder, partner, member, manager (or equivalent position) or employee of any entity not named in the Declarations, except as provided in paragraph I.E.5. This exclusion does not apply to services as a member, director or officer of a bar association, ethics, peer review, formal accreditation or licensing body, or similar professional board or committee;
2. A trustee of a pension, welfare, profit-sharing, mutual or investment fund or investment trust;
3. A fiduciary under the Employee Retirement Income Security Act of 1974 and its amendments or any regulation or order issued pursuant thereto, or any other similar state or local law; provided, however, that this exclusion will not apply to Claims where an Insured is deemed to be a fiduciary solely by reason of Professional Services to an employee benefit plan; or
4. A public official or employee, or representative of a governmental body, entity or agency, provided that this exclusion will not apply to Claims where an Insured is deemed to be a public official, employee or representative solely by reason of Professional Services provided to such governmental body entity or agency.
K. INVESTMENT SALES, SOLICITATION AND ADVICE: This Policy does not apply to any Claim alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of or in any way involving:
1. the promotion, sale or solicitation for sale of securities, real estate or other investments, by any Insured; or
2. recommendations, representations, or opinions concerning specific investment advice by any Insured or any person or organization referred to by any Insured, or any person or organization referred to by any Insured in connection with portfolio or trust account management, or the performance or non-performance of securities, real estate or other investments.
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This blog is an excerpt from the policy. The complete policy along with applicable endorsements could impact the information provided above.
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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
(616) 940-1101 Ext. 7080