Recently, we covered the topic of exploring professional liability coverage for those attorneys who choose to hang their own shingles (read Going Solo: How to Protect Your New Practice), either at the start of their careers or after years of service in-house or at another firm. Having addressed the issue of going solo, we must also think about what you should consider if you instead go in-house? What type of insurance coverage is needed for an in-house counsel position?
Employed Lawyers Insurance is a special type of policy. It’s often added or offered in addition to a directors and officers liability policy that protects you for the services you provide to your employer in your capacity as in-house counsel. And although malpractice claims by a corporate entity against its in-house counsel are rare, they do happen. Attorneys considering in-house positions should consider such coverage, if only for the peace of mind it provides. In-house attorneys who are not insurance experts and who assume they should be covered by a company’s directors and officers liability policy can quickly find themselves in jeopardy.
Just a few of the potential malpractice claim facing in-house counsel include:
- Failure to properly coordinate with the corporation’s IT team to store and preserve electronic information of the in-house counsel’s office
- Contract negotiations or contract review performed on behalf of the corporation
- Providing legal advice to human resource and other executives within the company
- Wrongful termination lawsuits which name in-house counsel as well as the corporation
Employed Lawyers Insurance is written specifically for in-house counsel serving at public, private and non-profit organizations that cover liability related to claims that might be brought either by an employer or third parties. This coverage can also be written to cover the work performed by paralegals and certain administrative staff.
Even with Employed Lawyers Insurance, in-house attorneys would do well to also recognize that these types of policies may also have limitations or exclusions regarding coverage for pro bono or other moonlighting activities. Separate liability coverage for those types of activities should be investigated if either or both are possibilities for anyone in an in-house role.
Because expanded regulation has altered the duties and responsibilities of in-house counsel in the past decade or more, there is increased scrutiny of these attorneys and the companies who employ them. Making sure you are covered is a prudent move and avoids the potentially incorrect assumption that coverage is provided by an employer if you are working in-house.