In this space, we’ve talked a bit about “what” is covered by lawyers malpractice insurance. In this post, we want to take a look at “who” may be covered by your lawyers malpractice insurance policy.
Who Is Covered Under Lawyers Malpractice Insurance?
Generally speaking, lawyers malpractice insurance anticipates providing coverage to the “named insured,” and any individual person or entity who may face a claim arising out of work done under the auspices of the “named insured.” That named insured may be an entity like a law firm organized as an LLP or some other professional service designation like a professional corporation, or in the case of a solo practice, it might be a specific individual lawyer.
Usually, legal malpractice claims are styled so that they name both a law firm entity and specific individuals as defendants, thus the need for malpractice policies to be broad enough to speak to both types of defendants. Coverage is usually not limited to defense and liability of attorneys but is intended to speak to errors and omissions committed by non-lawyer employees or agents of the named insured. This generally includes employed secretaries, paralegals, lawyer associates and “of counsel” attorneys. Because professional liability claims may not ripen until several years after a particular error or omission, it can be the case that the specific individual who is alleged to have made the mistake is no longer employed by the named insured. Even so, it is the named insured’s malpractice policy that would be invoked to provide defense and coverage on behalf of that former employee because the claim rests in work done while that defendant was working under its auspices.
Who Isn’t Covered?
While under some circumstances coverage may extend to investigators or other agents hired by the named insured in connection with a representation, it is far from automatic: coverage will rest in part on the nature of the relationship between you and that outside contractor and the nature of the alleged error. It may also be governed by language regarding indemnification of others that appear in your lawyers malpractice insurance policy or in their various liability insurance policies.
Generally speaking, your lawyers malpractice insurance is not intended to cover other attorneys with whom you collaborate but who are not part of your firm. This would include attorneys with whom you simply share space or other attorneys who may have been representing other parties in a particular representation. If they were not working under your direction or your control, they would not be anticipated as beneficiaries of your malpractice policy. If you hire temporary legal staff or contract lawyers for a particular representation, coverage may depend upon disclosure to your insurance carrier and/or the nature of their contract with you. Likewise, you may or may not be covered if you hire yourself out to another attorney in that way. Always check with your carrier and with any contract lawyer before proceeding to determine whether you need to take steps to make sure there are no gaps in your coverage, or that you are not taking on liability you don’t wish or intend to carry.