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 and government agencies. It is imperative that a successful organization and its legal staff recognize their real legal risks and then purchase coverage to protect against those risks.
Risks Facing In-House Attorneys
The following are just some of the many risks that in-house attorneys regularly face:
- Attorneys at private companies face exposures when performing contract negotiations, giving advice to Human Resources professionals, assisting with mergers and reviewing contractual language.
- For public companies, Sarbanes-Oxley (SOX) increases potential exposure—for publically-traded companies only.
- Since electronic information is discoverable and recoverable, it must be stored and preserved just like paper documents once were. In-house attorneys should work with IT professionals to ensure 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 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:
- Protection from demands, suits or proceedings for damages or injunctive relief
- A 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
- The 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 Insurance Plus LLC to learn all about our insurance solutions for your business today.