Employed Lawyers Insurance | What | Why | How Much Does It Cost?
Do you have in-house attorneys? A general counsel? Want to know about employed lawyers insurance for your firm?
In this video and post, we’re going to review employed lawyers’ insurance – what – why, and how much!
Employed Lawyers Professional Liability Insurance as it’s formally known, is an E&O or Professional Liability coverage form that protects lawyers who are employed in corporate settings rather than in law firms.
These attorneys are commonly known as the company’s General Counsel or In-House Attorney.
General Counsel or in-house attorneys can be commonly found in private equity firms, venture capital firms, and hedge funds as well as larger private firms where they provide legal counsel to the company’s leadership.
Why is Employed Lawyers Insurance coverage needed?
For a few reasons.
First, protection for errors made by in-house attorneys would not be covered by the firm or fund’s general liability or D&O insurance since they are providing a professional service to the firm.
In fact, the claims which can arise from employed lawyers would likely not be covered under a fund’s D&O / E&O policy since that is specifically designed to cover claims arising from errors and omissions in the conduct of the fund.
Second, the same types of claimants that may allege a wrongful act against a private firm or a fund may sue the in-house attorneys working in your company.
Creditors, vendors, government regulators, customers, shareholders, competitors, and even your own employees can sue your general counsel / in-house attorneys for legal malpractice.
What does it Cover?
In a nutshell, employed lawyers insurance covers your in-house attorneys from allegations of errors and omissions while carrying out their legal duties while working for your company.
Employed Lawyers coverage can be purchased as a stand-alone policy, but some insurers can include it as part of your D&O policy.
This “add-on” to a D&O policy is not recommended as it’s not as broad as stand-alone coverage and usually it’s sub-limited to a lower limit of coverage.
A stand-alone policy provides your in-house attorneys with dedicated coverage without sharing limits with your D&O policy.
It is broader in its scope of protection and can include pro bono work, as well as “moonlighting” – this is where an employed attorney gives legal advice to someone other than the insured entity of your company.
What does it Cost?
As always this is a difficult question to answer because it’s going to depend on several factors.
The industry the company is in, the size of the company, geography, the number of attorneys covered, the limits of coverage and retention purchased, and so on.
But roughly speaking a $1,000,000 limit of coverage for employed lawyers in a mid-sized firm is going to run about $1,500 to $3,500 per year for a single attorney.
More attorneys on staff will of course cost more.
If you’d like to find out more about employed lawyer’s insurance and get a firm quote, why not give me a call, or drop me an email and let’s chat
In fact, click the button below to get started! Let’s talk and see if we’re a good fit for your business.