The adage “You can be sued for anything these days” may be all too familiar for attorneys. However, many in-house attorneys fail to purchase Employed Professional Liability Coverage to protect themselves against potential lawsuits. Even though most claims are brought on by clients, employed lawyers are also subject to suits from third parties, such as employees, shareholders, government agencies, etc. So, what’s an organization to do? Well, it is important that a successful firm and its legal staff recognize their legal risks and how to protect themselves.
Risks Facing In-House Attorneys
- Attorneys at private companies face exposures when they perform contract negotiations, give advice to Human Resources professionals, assist with mergers, review contractual language, etc.
- For public companies, Sarbanes-Oxley (SOX) increases potential exposure (for publically-traded companies only).
- Since electronic information is discoverable, it must be stored and preserved just like paper documents once were. In-house attorneys should work with IT professionals to assure compliance with this rule.
- Clients may sue over a contract that did not work in their favor in which the attorney had a hand in writing.
- Termed employees may sue the employer and name the attorney for negligence.
- Attorneys are at risk even when performing moonlighting services or pro-bono work.
To protect against these risks, it is wise to purchase Employed Lawyers’ Professional Liability Insurance coverage. Typical policies may feature the following:
- Age, sex and marital status – People under 25 years old are more likely to get into an accident, so rates will be higher for young adults. Males and single individuals have higher premiums, as well.
- The car you drive – A Porsche isn’t going to be cheap to insure since fixing it after an accident would cost much more than a typical sedan like the Ford Focus or Honda Civic. Cars that are commonly stolen (such as the Civic or Toyota Camry) might also come with a higher premium.
- Your driving record – Expect to see a premium increase for every violation or accident you have had. Luckily, these only affect premiums for three to five years after they occur.
- Your driving habits – Driving more miles or using the vehicle for business can increase your rates.
- Your coverage limits – Higher limits are often advisable (accidents can be extremely expensive), but they result in higher premiums. A low deductible also raises your premium.
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- Protection from demands, suits or proceedings for damages or injunctive relief.
- Policy may be written as either a “claims made” or “claims made and reported”; and a “duty to defend” or “non-duty to defend” basis.
- Responds to licensing proceedings for in-house attorneys to practice law.
- Deals with compliance for SOX.
- Provides defense against claims alleging wrongful acts.
- Wrongful acts and claim definitions are expanded and broad.
- Extends to pro-bono or moonlighting work done by in-house lawyers.
- Includes full-time on-staff attorneys and contract and independent contract lawyers and support staff members.
- Advance of defense costs, even if allegations are found to be groundless.
- Coverage extends globally.
- Coverage for non-client claims.
- Coverage for SEC and regulatory claims.
- Punitive damages coverage.
- Covers claims from coworkers that arise out of the attorney’s work at the organization.
- Covers costs for claims brought by the employer, board of directors and officers.
In-house counsel should make sure they are protecting themselves from risk while they work to protect their employer from risk. Contact ARCW Insurance to learn all about our insurance solutions for your business today.
This information is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. Should you have any questions or would like to discuss your risk exposure with your law firm’s professional malpractice insurance, please contact the insurance pros at ARCW Insurance. We are here to help.