What Professional Services does an Attorney Malpractice Policy Cover? – ISMIE

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. 

ISMIE defines Professional Services as:

IV.        DEFINITIONS

H. Immediate Family Member means a:

1.     parent;

2.     child;

3.     grandchild;

4.     brother;

5.     sister; or

6.     past or present spouse,

of any past or present Insured.

 

Q. Professional Services means:

1.     those services performed for a client in the Insured’s capacity as a lawyer for a monetary fee;

2.     those services performed as an arbitrator, mediator or notary public for a monetary fee;

3.     those services performed as a title agent for a client which are incidental to services performed as a lawyer for the client for a monetary fee;

4.     pro bono services performed by an Insured if at the time such services were rendered, they were approved by a partner, director or officer of the Named Insured to be performed without compensation;

5.     those services performed as a member of a formal accreditation, standards review or similar professional board or committee solely related to the profession of the practice of law, but only when such formal accreditation, standards review or similar professional board or committee solely related to the profession of the practice of law does not indemnify the Insured or have insurance coverage applicable to the Insured in respect of such services; and

6.    those services performed as an administrator, conservator, receiver, executor, trustee, guardian, or any similar fiduciary capacity, or court-appointed trustee. However, no coverage shall apply to any loss sustained by any Insured as the beneficiary or distributee of any trust or estate.

V.         EXCLUSIONS

This policy does not apply to any Claim based upon or arising out of:

 

C.   1. an Insured’s capacity as a fiduciary under the Employee Retirement Income Security Act of 1974 and any amendments thereto. However, this exclusion shall not apply if:

(a)   a court of competent jurisdiction deems an Insured to be a fiduciary under such Act solely by reason of Professional Services an Insured rendered to any employee benefit plan; or

(b)   an Insured is appointed as a Receiver, Trustee or Custodian of an employee benefit plan by a court of law; or

2.     any actual or alleged violation of the Racketeer Influenced and Corrupt Organizations Act.

 

D. Professional Services performed for any person by an Insured, if at the time of any negligent act, error or omission giving rise to the Claim, such Professional Services were rendered to an Immediate Family Member.

 

E. Professional Services performed by an Insured for any entity, or any individual partner, member, director or employee of such entity, if at the time of any negligent act, error or omission giving rise to the Claim:

1.     such Insured or his/her Immediate Family Member controlled or owned more than 10% equity interest, operated or managed such entity; or

2.     such Insured or his/her Immediate Family Member was a partner, member, director, officer or employee of such entity.

 

H. an Insured acting in the capacity as:

1.     an executor, administrator or personal representative of an estate or as a trustee if the Insured or their Immediate Family Member is or was a beneficiary or distributee of said estate or trust;

2.     an officer, director, trustee, partner or other member of a governing body of any entity other than the Named Insured and other than an accreditation or standards entity within the scope of Section IV., Definition Q., Professional Services, paragraph 5.; or

3.     a public official or employee of a governmental body, agency or subdivision thereof, unless such capacity is deemed as a matter of law to be a public official, employee or representative of such entity solely by virtue of an Insured rendering Professional Services.

 

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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.

    Managing Director, CEO
   

     (616) 940-1101 Ext. 7080