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.
General Star defines Professional Services as:
III. DEFINITIONS
O. Professional Services mean only those services rendered by an Insured in the following capacities:
1. lawyer;
2. law clerk, paralegal, legal secretary or other legal support staff;
3. arbitrator, mediator, lobbyist, notary public, title insurance agent, or as a member, director, or officer of any Bar Association, its governing board or any of its committees;
4. administrator, conservator, executor, guardian, receiver, trustee or in a similar fiduciary capacity, if such services are directly connected with the Insured’s practice of law; or
5. publication or presentation of research papers or similar materials related to the practice of law but only if the total fee generated from such publication or presentation does not exceed $25,000.
In all events, coverage as is afforded with respect to Professional Services shall only apply for services performed by an Insured for remuneration inuring to the benefit of the Named Insured or Predecessor Firm, or on a pro bono basis, if, prior to the performance of such services, a partner, director or officer of the Named Insured or Predecessor Firm approved of such services without a fee.
IV. EXCLUSIONS
This Policy does not apply to any Claim made against the Insured based upon, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving:
J. any business enterprise other than the Named Insured or a Predecessor Firm which is or was more than 15% owned by any Insured or an accumulation of Insureds, or in which any Insured is or was an officer, director, partner, manager, or employee, or which is or was directly or indirectly controlled, operated or managed by any Insured, other than solely in a fiduciary capacity;
This Exclusion applies whether or not the Insured’s activities also constitute or involve Professional Services.
K. any Insured’s actual or alleged activities or capacity as a fiduciary under the Employee Retirement Income Security Act of 1974, any amendments, regulations or orders issued pursuant thereto, or any similar provision of any federal, state, local or foreign regulation, statute, rule or law;
Q. Professional Services rendered by or on behalf of any Insured to another Insured or any other individual or professional corporation who, at the time of the Wrongful Act, was a partner, principal, officer, director, stockholder, member, or employee of the Named Insured or Predecessor Firm;
S. any actual or alleged investment advice, promotion, sale, solicitation, or recommendation of any securities, real estate or other investments by any Insured;
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, CPIA
Managing Director, CEO
(616) 940-1101 Ext. 7080