Coverage Question Series – Part 30
Post on November 23rd, 2018
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 former associate was sued for work performed while employed at my firm, am I covered?
Yes, your firm is covered but the associate may be as well! Shortly after your associate left for greener pastures, you received a complaint from a client alleging the deed drafted by the associate for the client’s family trust is irreparably defective. Your policy would respond with coverage for the firm but also provides coverage for the associate. If the act, error or omission occurred while the associate was listed on your firm’s policy and coverage would otherwise be provided to the firm, coverage would be provided to the associate as an Insured under the policy. LPLP-1s (05-2018) p.5, IV. PERSONS INSURED, (e).
On the other hand, if the client left with the associate and the act, error, or omission occurred while the associate was no longer on your policy, the associate no longer meets the requirements of an Insured person. Coverage would not apply to the associate, but if your firm is a co-defendant in such a case, your policy would still provide defense for your firm.
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.
Carl Marsh, Esq.