E&O – Errors & Omissions Liability, also known as Professional Liability or Malpractice Coverage

Every lawyer and law firm should carry this basic professional indemnity coverage, which provides for a defense and indemnity for claims arising out of the performance of “professional services,” meaning the practice of law. Such policies also often cover services as a Notary Public, and can be endorsed to also cover services rendered as a Title Agent. Important variations in coverage forms include treatment of “of counsel” and independent contractor attorneys, plus differences in coverage definitions for Personal Injury.

D&O – Directors & Officers Liability, known more formally as “Management Liability”

2015-11-13-14.14.00-225x300As the practice of law grows more complex, and as firms grow in size, the management of the firm presents additional insurance risks, both to the firm itself, as well as to the individual shareholders and employees making the decisions. Claims frequently involve disputes over business decisions, (especially mergers) plus partnership and compensation issues. Other insurance policies like E&O and General Liability, exclude coverage for what are known as “Acts and Decisions.”

Given the high level of financial exposure faced by the managing individuals of law firms, (and potentially their spouses and even survivors,) additional “Side A” coverage should be considered along with the standard A,B,C form, which should also be selected with great care.

Management Liability policies can be written to include Employment Practices Liability, which includes coverage for claims of discrimination, harassment, and wrongful termination. Employment claims can cross over into Management Liability if the allegation includes failures of hiring, training, and supervision.