Friday, August 26, 2011

Employed Lawyers - Questions Answered

Mecklenburg County Courthouse, Charlotte NC

Several questions have been asked as a result of the recent post regarding Employed Lawyers. Please note the following...

1. Q: If my attorney prospect has their own practice and works part time as an employed attorney for a corporation (or non-profit), won't the malpractice coverage for the attorney's firm include coverage for work they do for others?
A: No. "Work for others" could loosely be what we call their work for their own clients, or possibly as an "of counsel" for another firm. But while "work for others" is a concept, it's not common language in a lawyer's malpractice policy. In a situation like this start by looking at the definitions of Named Insured and Insured, and check the lawyer's policy for any endorsements that might name a third party. It's unlikely the wording will include a third party, like the attorney's part time employer in this case, as an insured or named insured.

And for those of you thinking what if the situation is reversed, i.e. the attorney is full time in practice and part time working for another entity. The response is the same - the intent of the attorney's private practice policy is not to pick up work they do as an employee for a separate and independent third party employer.

2. Q: What if the attorney is working for a company that has their own professional liability coverage - wouldn't that E&O policy cover the attorney? E&O is E&O, isn't it?
A: No again. If as an example an Engineering firm hires an attorney full time, the E&O policy for the engineering firm will be specifically worded to cover the engineering exposures. There may also be wording on some E&O policies that not only provide a definition of professional services, but they may also have an exclusion for other professional services. The other practical consideration is that many of the companies that write various E&O classes do not write lawyers malpractice, so they wouldn't want to add the attorney's exposure.
Also, even if a carrier writes both attorneys and other E&O, the policy wordings for both are very different, so adding wording for one type of operation to wording for another is never the preferred way to write a policy.

The only proper way to do this to get correct coverage for your client(s) and avoid an E&O exposure for you is to provide the appropriate policy(ies). If you have a risk with an employed lawyer, find an employed lawyer policy for them.

Other questions? Call or email and I'll be happy to answer.

No comments:

Post a Comment