What Professional Services does an Attorney Malpractice Policy Cover? – Westfield Specialty

What Professional Services does an Attorney Malpractice Policy Cover? – Westfield Specialty

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.

Westfield defines Professional Services as:

 III.        DEFINITIONS

P.    Professional Services means the services provided to others by an Insured for a fee (regardless of whether such fee is actually collected) or, if pro bono, with the prior approval of the Named Insured, as:

(1)   an attorney in the conduct of any business by or on behalf of the Named Insured in its professional capacity;

(2)  a notary public, including a virtual notary public, provided that the Insured witnessed and attested to the authenticity of the signature notarized by such Insured;

(3)  an administrator, conservator, executor, escrow agent, trustee, guardian, receiver, or committee or in any similar fiduciary capacity incidental to the practice of law by the Named Insured;

(4)  an arbitrator or mediator;

(5)  a member, director, or officer of any lawyer disciplinary board or committee, or any professional legal association, its governing board, or any of its committees;

(6) a title insurance agent pursuant to a written agency agreement with a licensed title insurance company, provided that any coverage afforded under this Policy shall be excess to and shall not contribute with any title insurance errors or omission coverage available to the Insured;

(7)  an expert witness, provided that such Insured was retained to offer expert opinion on issues specific to the law, legal procedure or practice, or the legal profession

(8)   a government affairs advisor or lobbyist; or

Professional Services shall also include an Insured’s activities in publishing or presenting an article or speech related to the practice of law that does not pertain to the representation of a particular client.

IV.        EXCLUSIONS

The Insurer shall not be liable for Loss on account of any Claim:

B.       Director/Officer/Fiduciary and Outside Capacity

based upon, arising from, or in consequence of:

(1)  any Insured acting or allegedly acting in the capacity as a director, officer, shareholder, partner, manager, or member of any entity (other than the Named Insured), a lawyer disciplinary board or committee, or a professional legal association, its governing board or any of its committees;

(2)  a trustee of a pension, welfare, profit-sharing, mutual, or investment fund or investment trust;

(3)  a fiduciary under the Employee Retirement Income Securities Act of 1974, any rules or regulations promulgated thereunder, all as amended, or any similar federal, state, local, or foreign law, common law, or regulation (“ERISA”); or

(4)  the performance of any services or duties by any Insured Person on behalf of or in the name of an entity (other than the Named Insured);

provided that this Exclusion B shall not apply to any Claim arising out of a Wrongful Act committed, attempted, or allegedly committed or attempted by any Insured in the course of providing Professional Services to such entity in the name of or on behalf of the Named Insured;

F.        Capacity as Public Official

based upon, arising from, or in consequence of any Insured acting or allegedly acting in the capacity as a public official or an employee or representative of a governmental body, subdivision, or agency unless such 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 Professional Services to it;

G.        Funds Exclusion

based upon, arising from, or in consequence of the actual or alleged conversion, misappropriation, or improper commingling of client funds;

H.        Business Enterprise

based upon, arising from, or in consequence of any Wrongful Act committed, attempted, or allegedly committed or attempted by an Insured in connection with any business entity (other than the Named Insured) if at the time of such Wrongful Act:

(1)   the percentage of ownership of one or more Insureds exceeds fifteen percent (15%) of such business enterprise;

(2)   any Insured is a partner or employee; or

(3)   any Insured controlled, operated, or managed such business enterprise in a non-fiduciary capacity;

J.        ERISA

based upon, arising from, or in consequence of any actual or alleged violation of ERISA; provided that this Exclusion J shall not apply to any Claim arising out of a Wrongful Act committed, attempted, or allegedly committed or attempted by an Insured in the course of providing Professional Services;

K.        Intellectual Property

for any actual or alleged misuse of confidential or proprietary information, copyright, patent, trademark, or trade secret infringement, piracy, theft, or conversion of business ideas, business methods, or trade secrets;

L.        Investment Advice

based upon, arising from, or in consequence of the promotion, sale, management, or solicitation by any Insured of any security, real estate, or other investment;

M.      Employment Practices Violation

based upon, arising from, or in consequence of any actual or alleged: (a) employment or prospective employment of any natural person, or any employment practice or employment-related tort including, but not limited to, wrongful termination, dismissal or discharge, employment discrimination, employment-related harassment or defamation, or breach of employment contract; or (b) discrimination against any natural person or entity; or

N.       Cyber

based upon, arising from, or in consequence of any actual or alleged;

(1) unauthorized or unlawful access to or use of, alteration of, or damage to any computer, computer program, network, or database, including the infection of any of the foregoing through the transmission of a computer virus, malware, spyware, or other fraudulent or unauthorized computer code that: (a) modifies, alters, damages, destroys, deletes, records, or transmits information; (b) contaminates other computer programs or computer data; or (c) consumes, restricts, or inhibits computer resources or usurps the normal operation of a computer system;

(2) denial of service or delay, disruption, impairment, or failure of any computer network, communication network, technology, information, or telecommunication network, service, hardware, or software;

(3) unauthorized or unlawful access to, or disclosure, alteration, theft, collection, storage, use, redisclosure, capture, purchase, transmission, process, sale, lease, trade, or dissemination of, or loss of any data or confidential or proprietary business information or personally identifiable information as defined by any applicable federal, state, local, or foreign law; or

(4) violation of any federal, state, local, or foreign law related to privacy protection or data security.

This Exclusion N shall not apply to any Claim arising out of a Wrongful Act committed, attempted, or allegedly committed or attempted solely in connection with the Insured’s provision of legal advice to a client of the Named Insured; provided that the Insurer’s maximum liability for all Loss arising from all such Claims shall not exceed the amount set forth in Item 3(G), Cyber Claim Sublimit, of the Declarations, which amount is a part of, and not in addition to, the Claims Aggregate Limit set forth in Item 3(A)(ii) of the Declarations.

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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