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.
Corepointe defines Professional (Legal) Services as:
II. DEFINITIONS
I. “Legal services” mean:
1. those services performed by an Insured for others as a lawyer, arbiter, mediator, expert witness, title agent, a notary public, governmental affairs advisor or lobbyist, or member of a bar association, ethics, peer review or similar professional board or committee but only if such services are performed for a fee that inures to the benefit of the Named Insured except that no fee need inure to the Named Insured where eleemosynary (pro bono) services are performed and approved by the Named Insured. Those services as an author or publisher of legal research papers or legal materials or the presenter of legal seminars or materials, but only where such services are performed without compensation or compensation attributable per publication, presentation or seminar is less than $25,000. Any title agency or company, on whose behalf the Insured acts as title agent or designated issuing attorney, is not an Insured under this Policy;
2. those services performed by an Insured as an administrator, conservator, receiver, executor, guardian, trustee or in a fiduciary capacity excluding acts of a “fiduciary” as defined 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. Services performed by an Insured as an administrator, executor or trustee must be services ordinarily rendered by a lawyer and with the approval of the Named Insured at the time of retention.
IV. EXCLUSIONS
D. to any claim based on or arising out of an Insured’s capacity as:
1. a former, existing or prospective officer, director, shareholder, partner or manager of a business enterprise or charitable organization unless such enterprise or organization is named in the Declarations; or
2. a former, existing or prospective officer, director, shareholder, partner, manager, or trustee of a fund or trust which is a pension, welfare, profit-sharing, mutual or investment fund or trust; or
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;
E. to any claim based on or arising out of an Insured’s capacity as a public official or an employee or representative of a governmental body, subdivision or agency unless the Insured is deemed as a matter of law to be a public official or employee or representative of such entity solely by virtue of rendering legal services to such governmental body, subdivision or agency;
F. to any claim based on or arising out of legal services performed for any existing or prospective partnership, organization, corporation, company or other business enterprise, including any claim made by or on behalf of such partnership, organization, corporation, company or other business enterprise, if at the time of the act or omission giving rise to such claim:
1. any Insured controlled, operated or managed or intended to control, operate or manage such enterprise; or
2. any Insured:
a. was a partner or employee of such enterprise; or
b. directly or indirectly owned more than 10% of such enterprise; or
3. Insureds cumulatively owned more than 35% of such enterprise.
As used in this exclusion, the word. “partner” shall be deemed to include members of limited liability companies or limited liability partnerships.
CLICK HERE TO OBTAIN AN ATTORNEY MALPRACTICE QUOTE
This blog is an excerpt from the policy. The complete policy along with applicable endorsements could impact the information provided above.
Lee Norcross, MBA, CPCU
(616) 940-1101 Ext. 7080