< Back
Coverage Question Series – Part 52
Post on April 26th, 2019
This is a continuing series in which we address policy coverage questions that we routinely discuss with you and your colleagues. The answers provided are based on the basic policy form, currently LPLP-1s (effective for all policies new or renewed as of May 1, 2018). Refer to your specific policy and any endorsements attached thereto that may change coverage or the answers provided here.

A client has requested I become her company’s General Counsel, am I covered?

Possibly! A new start-up for a printer-share service that seeks to turn unused personal printer time into profit has asked you to be its “General Counsel.” You have doubts that their idea will print the money that they expect. You intend to continue your own lawyer-share service with other clients rather than join the company full-time.

Two coverage considerations to make when considering a General Counsel position are whether the position is as an employee and if you will be an officer of the company. The policy does not apply to “any “Claim” made by an employer against an Insured who is or was a salaried employee of such employer,” EXCLUSIONS, (c), and the policy does not apply to “any “Claim” arising out of the Insured’s act, error, or omission as an officer, director, partner, member, owner, employee or in a fiduciary capacity of . . . any business enterprise, non-profit or charitable organization unless appointed in a fiduciary capacity to such by a court of competent jurisdiction,” EXCLUSIONS, (f)(1).

Pro-tip: When entering into a General Counsel position, we highly recommend a detailed engagement letter. The engagement letter should clearly list your duties to the company, the nature of the relationship, and any continuing obligations for legal services provided.

As you should expect, these Q&A scenarios are based on simple hypotheticals. Coverage determinations for an actual claim are ultimately based on the unique facts, applicable law, and the Terms, Conditions, Limitations, Exclusions, and Endorsements of your policy.
Please contact me at [email protected] if you have any questions!
Carl Marsh, Esq.
Claims Counsel