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    In-House Lawyers Need Legal Malpractice Too

    Should the Coverage be Provided by Your Company?

    Although attorneys employed inside firms may not have paying clients, they still have an Errors & Omissions exposure that needs to be addressed.  In most cases this is through a company-paid Employed Lawyer’s Professional Liability policy.

    Potential scenarios that could lead to claims from the attorney’s work within the scope of his or her duties:

    1. Incidental advice to, or about, fellow employees on:
    2. Matters involving company customers, competitors or other business associates whereby the counter-party claims the legal work was negligent or misleading
    3. Complaints by regulators concerning the attorney’s work

    Some within the company may say insurance is unnecessary because a claim would be covered under the company’s D&O policy.  However, the advice to employees may, in the insurer’s view, fall outside the scope of the attorney’s work for the company.  Also, the D&O policy has exclusions that would negate coverage for the attorney in the following areas: employment matters (the EPL exclusion), retirement matters (the ERISA exclusion), and matters with competitors (the Unfair Business Practices exclusion).

    Clear to the company’s D&O insurer, but very gray in reality

    Insurers latch on to exclusions like moths to a light.  It seems applicable and binding to them if there is a hint the activity might fall under the exclusion.  But in matters within a company involving the in-house lawyer, it is too dangerous at worst, and ambiguous at best, to rely on the company D&O policy.

    The premium for Employed Lawyers coverage is very low, and the company owes it to the attorney to provide it.  Employed lawyers should make that case to their bosses.

    (c ) Licata Risk & Insurance Advisors, Inc. 2019

    Frank Licata

    [email protected]

    617.718.5901

    
    

    Jan 13, 2020

    Licata Risk Licata Risk & Insurance Advisors, Inc.
    137 South Street, Second Floor
    Boston, MA 02111-2848
    617-451-2140     [email protected]
    LicataRisk Advisors is an independent risk management and insurance consulting firm. We are not brokers and we do not sell insurance. We are not connected to any insurance company or product in any way and do not receive commissions. This is an important difference as you will have an expert on your side who is only committed to you.

    Licata Risk is not a law firm and does not practice law. General advice and contract input by the consultants, including those who are attorneys, is to provide insight into the risk and insurance aspects. Your attorney should be the final authority on any legal matter.