Lawyers Professional Liability Insurance Attorneys Malpractice Insurance

Throughout this policy, the terms we, us and our refer to the Company providing this insurance. The terms you and your refer to the persons and entities insured under this policy. Other terms with bold print have special meaning and are defined in the policy.

A. COVERAGE

1. WHAT THIS POLICY INSURES
We will pay on your behalf all sums which you become legally obligated to pay as damages because of any claim or claims, including claims for personal injury, first made against you. The claim must first be reported to us during the policy period and must arise from any act, error or omission to which this policy applies. We will pay up to our limit of liability and in excess of the deductible shown in the Declarations, provided all of the following are true.

a. The claim must arise out of the rendering of or the failure to render professional services.
b. The claim must be caused by an Insured under this policy or by any person for whose acts, errors or omissions you are legally liable.
c. The act, error, omission or personal injury must have first occurred on or after the applicable Retroactive Date(s).
d. You had no knowledge of facts which could have reasonably been expected to result in the claim, or any knowledge of the claim, prior to the effective date of this policy.
e. There is no other insurance policy which provides coverage for the claim.

2. WHEN A CLAIM IS FIRST MADE
A claim is first made against you at the earlier of the following:

a. when you first receive written notice that a claim has been made; or
b. when you first receive information or have knowledge of specific circumstances involving a particular person or entity which could reasonably be expected to result in a claim.

All claims arising out of a single or series of related act(s), error(s), omission(s) or personal injury arising from the rendering of or failure to render professional services on behalf of a single client will be considered one claim. The claim will be first made when the first of these claims is made.

3. WHEN A CLAIM IS FIRST REPORTED
A claim is first reported to us at the earlier of the following:

a. when we or any of our authorized agents first receive notice from you that a claim has been made; or
b. when we or any of our authorized agents first receive notice from you of the specific circumstances involving a particular person or entity which could reasonably be expected to result in a claim.

4. TERRITORY
This policy applies to acts, errors or omissions occurring anywhere in the world. However, the claim must be made and the suit must be brought within the United States of America and its territories or Canada.

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B. DEFENSE AND SETTLEMENT (INCLUDED IN LIMIT OF LIABILITY)

We have the exclusive right to investigate, defend and/or settle any claim made under this policy, even if the allegations are groundless, false or fraudulent. If the claim is excluded under this policy, however, we will have no duty to defend it. Payment of claim expenses will reduce the amounts available to pay damages. Our duty to defend any claim or pay any amount as damages or claim expenses will cease when our limit of liability has been exhausted. Upon exhaustion of the limits of liability, we will tender control of the defense to you. You agree to accept this tender of defense.

We will not settle a claim without your consent. If you refuse to consent to a settlement we recommend, then our liability for the claim will not exceed the amount for which the claim could have been settled, including claim expenses incurred up to the date of your refusal. In no event, however, will we pay more than the applicable limit of liability including claim expenses incurred. For the purpose of this section, settlement includes resolution of a disputed claim that would have occurred as a result of any court ordered process which you choose not to accept.

You are responsible for any fees charged by a lawyer defending you without our written consent.

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C. DEFINITIONS

Claim means:

a. a demand or suit for money or services you receive, including any arbitration proceedings to which you are required to submit or to which you have submitted with our consent; or
b. when you first receive oral or written information or have knowledge of specific circumstances involving a particular person or entity which could reasonably be expected to result in a demand or suit for money or services.

Claim Expense(s) means all expenses we incur or authorize in writing in the investigation, adjustment, defense or appeal of a claim. These expenses may include fees charged by a lawyer, mediator or arbitrator. Claim Expenses do not include salaries and expenses of our employees, or supervisory counsel we retain, nor the cost of providing a defense for grievance hearings or disciplinary proceedings of any kind.

Company means Professionals Direct Insurance Company, its successors or assigns.

Damages means monetary judgments, awards or settlements unless otherwise excluded.

Employment practices means any actual or alleged:

a. wrongful termination of the employment of, or demotion of, or failure or refusal to hire or promote, any person in violation of law or in breach of any agreement to commence or continue employment;
b. unlawful employment discrimination;
c. sexual harassment of an employee or applicant for employment; or
d. retaliatory treatment against an employee on account of that employee's exercise or attempted exercise of his or her rights under law.

Extended Reporting Period means an additional period of time for reporting claims. The extended reporting period starts after the policy termination date and ends at the extended reporting period expiration date, if any. Any acts, errors or omissions that result in claims, suits or proceedings that are covered under the extended reporting period must have occurred after the applicable retroactive date and prior to the policy termination date.

Insured means:

a. the Named Insured; or
b. any lawyer who is a partner, limited liability company member, officer, director, stockholder or employee of yours; or
c. any lawyer who was a former partner, limited liability partner, limited liability company member, officer, director, stockholder or employee of yours or a Predecessor Firm solely while acting in a professional capacity on behalf of you or a Predecessor Firm; or
d. any non-lawyer who was or is an employee of yours or a Predecessor Firm solely while acting on behalf of you or a Predecessor Firm; or
e. any “of counsel” or contracted lawyer listed on this policy or formerly covered under a policy held by you, but solely while acting in a professional capacity on your behalf; or
f. your heirs, assigns and legal representatives in the event of your death, incapacity or bankruptcy to the extent that you would have been covered.

Investment Advice means:

a. giving advice regarding the value of an investment; or
b. recommending investment in, purchase or sale of a particular investment; or
c. managing any investment; or
d. buying or selling any investment for another; or
e. acting as a broker for a borrower or lender; or
f. performing economic analysis of any investment; or
g. inducing others to make a particular investment; or
h. giving advice where the compensation for the advice is contingent upon the performance of a particular investment.

Named Insured means the firm or individual lawyer listed on the Declarations.

Permanently and Totally Disabled means total and continuous disability as a result of sickness or accidental bodily injury which prevents you from rendering professional services to others.

Personal Injury means:

a. false arrest, detention or imprisonment; or
b. wrongful entry or eviction or other invasion of private occupancy; or
c. malicious prosecution; or
d. the publication or utterance of libel, slander or other defamatory or disparaging material; or
e. a publication in violation of a person’s right of privacy; and
f. arising out of your rendering of or failure to render professional services.

Policy means this policy form, the Declarations, and any endorsement to the policy issued by us, and your application, including all supplements.

Policy Period means the period from the effective date of the policy to the expiration date or earlier termination date of the policy.

Policy Termination Date means the expiration date of the policy, the cancellation date of the policy, or the date an individual attorney is deleted from the policy.

Predecessor Firm means any law firm or legal entity that was engaged in the private practice of law that has been listed on the application as a predecessor firm; and to whose financial assets and liabilities you are the majority successor (more than 50%) in interest.

Professional Services means services you render in a lawyer-client relationship as a lawyer, mediator, arbitrator, notary public, administrator, conservator, receiver, executor, guardian, trustee, or in any similar fiduciary capacity. Professional services also means services you render as a lawyer for others as a mediator or arbitrator, speaker or author of legal treatises. Professional services will also include your activities as a member of a formal accreditation, ethics, peer review, licensing board, standards review, bar association or similar professional board or committee.

Retroactive Date(s) refer to the dates shown on the Declarations for the Named Insured firm and for the individual lawyers. The retroactive date is the date when you began your most recent period of continuous coverage. Acts, errors or omissions that occurred prior to the retroactive date are not covered by this policy.

We, Us, and Our refer to Professionals Direct Insurance Company, its successors or assigns.

You and Your refer to the Insureds covered under this policy.

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D. EXCLUSIONS

1. WHAT THIS POLICY DOES NOT INSURE
This policy does not apply to:

a. any claim arising out of your dishonest, criminal, malicious or fraudulent act, error or omission, whether or not intentional. However, we will provide for the defense of claims alleging personal injury arising out of your performance of professional services;
b. any claim made by or against any entity not named in the Declarations in which you:
(i) hold an interest of 10% or more as a partner, member, principal or stockholder; or
(ii) are an employee; or
(iii) directly or indirectly control, operate or manage;
c. any claim made against you arising out of your activities as partner, officer, director, member, principal, stockholder or employee of an entity not named in the Declarations;
d. any claim arising out of your activities as a public official or a full or part-time employee of a governmental body, subdivision or agency. This exclusion does not apply if your status is due only to the legal services you render under contract;
e. any claim arising out of your activities and/or in your capacity as a fiduciary under the Employee Retirement Income Security Act of 1974, its amendments and any issued regulation or order.
This exclusion does not apply if you are deemed to be a fiduciary solely because of legal advice rendered or that should have been rendered with respect to an employee benefit plan;
f. any claim arising out of a violation or alleged violation of the Securities Act of 1933 as amended, or the Securities Exchange Act of 1934 as amended, or any state securities law or similar state or federal statute, and any issued regulation or order.
This exclusion does not apply if the violation or claim involves or arises out of a public offering of securities to fewer than 15 investors or the private placement of securities to fewer than 15 investors;
g. any claim based upon or arising out of your alleged discrimination on the basis of race, creed, age, sex, marital status, national origin, height, weight, disability, sexual preference or any other discrimination prohibited by law;
h. any claim arising out of the rendering of or failure to render investment advice;
i. any claim based upon or arising out of your sexual contact or conduct or the threat of sexual contact or conduct;
j. any claim or loss you sustain as a beneficiary or distributee of any trust or estate;
k. any claim made by any Insured against you which does not arise out of professional services rendered or which should have been rendered in a lawyer-client relationship;
l. any claim made against you if the claim arises solely out of an act, error or omission of any other person or lawyer who is not an Insured as defined in this policy, including but not limited to claims based upon theories of partnership by estoppel, apparent partnership, apparent agency, ostensible agency, vicarious liability and/or any similar theory;
m. any claim arising out of any indemnity agreement into which you enter;
n. any claim arising out of your activities as a Certified Public Accountant, Insurance Broker or Agent, Title Abstractor, Title Agent, or Real Estate Broker or Agent;
o. any claim for fines, sanctions, penalties, punitive damages or any damages resulting from the multiplication of compensatory damages;
p. any claim for legal fees, costs or disbursements paid or owed to you;
q. any claim for exemplary damages, however defined, whether or not they are a component of compensatory damages in the jurisdiction where the monetary judgment, award or settlement is made, or to the extent that they are awarded for enhanced mental or emotional distress, injury to feelings, or arise from judgments based on fraud or misconduct;
r. any claim made against you which arises from notary services you provide in which the notarization occurred without the signor being present;
s. any claim for sanctions, penalties or fines if they were first awarded against you and your client(s) jointly and severally;
t. any act, error, omission, personal injury, or circumstance that was disclosed or that should have been disclosed in your application, whether reported to a prior insurer or not;
u. any claim arising out of the same, related or continuing professional services which resulted in a claim prior to the first policy we issued to you whether or not the claim was reported to any prior insurer.

2. INNOCENT INSUREDS
In the event that coverage under this policy would be excluded, suspended or lost because of a dishonest, criminal, malicious, or fraudulent act, error, or omission by one or more of you, we will cover any other of you who did not participate in, acquiesce in or fail to take appropriate action when you discovered the conduct, provided that you complied with all other policy provisions.

In the event that coverage under this policy would be excluded, suspended or lost because any of you concealed a claim from us, we will cover any other of you who did not participate in, acquiesce in or fail to promptly notify us of this concealment, provided that you complied with all other policy provisions.

We have the right to recover against any Insured responsible for dishonest, criminal, malicious or fraudulent acts, errors, omissions, or concealment, whether or not intentional, for any claim expenses or damages paid under this section.

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E. LIMIT OF LIABILITY AND DEDUCTIBLE

1. LIMIT OF LIABILITY - EACH CLAIM
The Each Claim limit shown on the Declarations is the most we will pay for the sum of all damages and claim expenses arising out of a single act, error, or omission or a series of related acts, errors or omissions, regardless of the number of claims made or the number of persons or entities making claims during the policy period or during the extended reporting period, if any.

2. LIMIT OF LIABILITY - AGGREGATE
The Aggregate limit shown on the Declarations is the most we will pay for the sum of all damages and claim expenses for all claims first made and reported to us during the policy period or during the extended reporting period, if any.

3. CLAIM EXPENSES
All claim expenses will first be subtracted from the limit of liability, with the remainder, if any, being the amount available to pay for damages.

4. DEDUCTIBLE
You will pay the deductible amount shown in the Declarations. We will not be required to make any payment for settlement of an otherwise covered claim until you have paid the deductible amount.

The deductible applies to each claim. The deductible applies to all damages, and in the event that we make any payment for damages and request reimbursement, the reimbursement is payable within thirty (30) days of written demand.

5. REIMBURSEMENT
You will be liable for amounts we have paid in settlement of claims or satisfaction of judgments in excess of the limit of liability. You will also be liable for amounts paid within the deductible. Each of you is jointly and severally liable for these payments, regardless of your individual business arrangements.

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F. SUPPLEMENTARY PAYMENTS

1. LAWYER DISCIPLINE DEFENSE
We will pay up to $10,000 for the reasonable fees of a lawyer assigned by us, or with our written consent, to defend you in a disciplinary proceeding, the purpose of which is to restrict or rescind your ability to practice as a lawyer. These proceedings must:

a. commence during the policy period;
b. be first reported to us or our authorized agent during the policy period;
c. arise from acts, errors or omissions that first occurred on or after the applicable retroactive date(s);
d. result from professional services rendered or which should have been rendered by you; and
e. not arise from acts, errors or omissions for which Section D of this policy excludes coverage.

We will not pay more than an aggregate total of $25,000 under this section, regardless of the number of proceedings or the number of you subject to these proceedings.

In the event you receive notice of a proceeding, you must:

a. immediately give us written notice of the proceeding; and
b. forward to us every request, notice, summons or other communication you receive.

All of the terms and conditions of this policy will apply with respect to the coverage provided under this section. There will be no extended reporting period for the coverage provided in this section.

The benefits provided under this section are additional benefits with limited coverage for specific claims and expenses which are otherwise excluded by this policy.

2. EMPLOYMENT PRACTICES DEFENSE
We will pay up to $5,000 for the reasonable fees of a lawyer assigned by us, or with our written consent, to defend you against claims arising out of employment practices solely while acting on behalf of the Named Insured or Predecessor Firm. The claim must:

a. first be made against you during the policy period;
b. first be reported to us or our authorized agent during the policy period;
c. arise from acts, errors or omissions that first occurred on or after the applicable retroactive date(s);
d. not include any labor or grievance arbitration or other proceeding pursuant to a collective bargaining agreement, unemployment, wage or hour violation;
e. not arise out of ownership of the Named Insured or Predecessor Firm; and
f. not arise from acts, errors or omissions for which Section D of this policy excludes coverage.

All of the terms and conditions of this policy will apply except exclusions D.1.g) and D.1.i) with respect to the coverage provided under this section. There will be no extended reporting period for the coverage provided in this section. We will not pay more than an aggregate total of $10,000 under this section regardless of the number of claims made or the number of persons making the claims.

In the event you receive notice of a claim, you must:

a. immediately give us written notice of the claim; and
b. forward every request, notice, summons or other communication you receive to us.

The benefits provided under this section are additional benefits with limited coverage for specific claims and expenses which are otherwise excluded by this policy.

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G. EXTENDED REPORTING PERIOD

You may obtain an Extended Reporting Period endorsement if we or you cancel or do not renew this policy, if we offer renewal under terms and conditions less favorable to you, or if you retire, cease the private practice of law or leave the Named Insured firm. You must have been continuously insured with us under this policy or any prior policy issued by us for not less than 12 consecutive months prior to the policy termination date.

The premium for an Extended Reporting Period will be based on our rates and rules in effect on the date this policy was issued or last renewed. It will be fully earned and non-refundable. You may purchase an Extended Reporting Period by requesting the coverage in writing within sixty (60) days of the policy termination date. If a premium is applicable, it must be paid at the time of the written request.

The Extended Reporting Period applies only to claims otherwise covered by this policy (except for claims made under Section F. Supplementary Payments). This coverage applies only to claims first made against you and first reported to us on or after the policy termination date and prior to the Extended Reporting Period Expiration Date shown on the Extended Reporting Period endorsement. If there is other valid and collectible insurance that would apply to a loss reported during the Extended Reporting Period, then coverage under this section will not apply, even though the limits of liability for the other insurance may be inadequate to pay all damages and claim expenses.

The Extended Reporting Period does not extend the policy period, increase the limits of liability as stated in the Declarations, or reinstate limits exhausted by the payment of claims. The deductible is waived.

To be eligible for the Extended Reporting Period Endorsement:

a. You must pay any premium and deductible amounts owed us; and
b. You must reimburse us for any amounts we have paid in settlement of claims or satisfaction of judgments in excess of the limit of liability.

2. RETIREMENT, DEATH OR DISABILITY
If you die or become permanently and totally disabled, do not have any other available insurance coverage and meet our eligibility requirements, we will issue an Extended Reporting Period Endorsement of unlimited duration without cost to you, provided:

a. Death was not caused by a self-inflicted injury or misuse or abuse of any substance.
b. Permanent total disability commenced after the effective date of the policy. The disability must be a result of accidental bodily injury, physical illness or disease, and not arise out of any self-inflicted injury or attempted suicide, or the abuse of intoxicants or controlled substances. Your inability to practice law must be certified in writing by a physician acceptable to us.

If you have retired completely from the practice of law, been continuously insured with us on a ProDirectSelect® and/or ProDirectPremier® policy for the immediately preceding five years, and have reached the age of 65, we will issue an Extended Reporting Period Endorsement of unlimited duration without cost to you.

3. AUTOMATIC EXTENSION
We will provide you 60 days after the policy termination date to report any claims to us. We will not issue an endorsement extending the policy period nor will we charge a premium for this Extended Reporting Period. The professional services rendered must have occurred prior to the end of the policy period. If there is another policy in force that would cover any claims reported under this automatic Extended Reporting Period, then this coverage will not apply.

4. SUSPENSION OF LAWYER
If you leave the practice of law as a result of loss, suspension or involuntary surrender of your license, you are not eligible to purchase or receive an Extended Reporting Period. If you have a solo practice when you lose your license, then neither the firm nor you are eligible to purchase or receive an Extended Reporting Period.

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H. CLAIMS

1. NOTICE OF CLAIM
If you become aware of any act, error or omission which could reasonably be expected to form the basis of a claim or suit, you will immediately give written notice to us or any authorized agent with the fullest information available. Any subsequent claim made against you will be deemed to have been made at the time initial notice was given to us. No subsequent policy issued by us will apply to such claim.

Notice of a claim by you or on your behalf to any of our authorized agents, with particulars sufficient to identify you, will be deemed to be notice to us.

2. ASSISTANCE AND COOPERATION OF THE INSURED
You must cooperate with us for purposes of investigation and defense without charge or reimbursement of your expenses. You will not make any payment, admit any liability, waive any rights, settle any claims, assume any obligations or incur any expense relating to claims reported under this policy without our prior written consent.

3. ASSIGNMENT OF RIGHTS OF RECOVERY AGAINST OTHERS
You agree to assign to us your rights of recovery against any other party for any damages or claim expenses we have paid on your behalf. You will do everything necessary to preserve our rights and will do nothing to jeopardize them.

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I. CONDITIONS

1. ACTION AGAINST THE COMPANY
You will not take any action against us unless:

a. you have complied in full with all of the terms of this policy; and
b. the amount of your obligation to pay has been finally determined by judgment after trial or by written agreement among you, the claimant and us.

No person or entity may join us as a party to any action against you to determine your liability under this policy. Your bankruptcy or insolvency or that of your estate will not relieve us of any of our obligations under this policy. In case execution against you is returned unsatisfied in an action brought by an injured person or his or her personal representative because of an insolvency or bankruptcy, then an action in the nature of a writ of garnishment may be maintained by the injured person or his or her personal representative against us under and subject to the terms of the policy for the amount of the judgment not exceeding the amount of the policy.

2. APPLICATION
By acceptance of this policy, you agree that the statements in the application and all supplemental information we requested are personal representations, that they will be deemed material and that this policy is issued in reliance upon the truth of your representations. This policy embodies all agreements existing between you and us, or any of our agents, relating to this insurance. You agree to a continuing obligation to report any material change to your practice, including but not limited to your areas of practice and the number of attorneys who are partners, principals, or employees of yours.

3. CHANGES
The terms of this policy will not be changed, except by written endorsement or amendment to the Declarations issued and duly signed by us. Any additions to or deletions from the lawyers listed in the application must be reported to us within thirty (30) days. Any merger or acquisition with other firms or solo practitioners occurring during the policy period must be reported to us in writing within thirty (30) days of the merger or acquisition, or the next anniversary of this policy, whichever is sooner. We will have the right to adjust the policy terms, conditions, exclusions and premium to reflect any change in exposure created by any merger or acquisition.

4. OTHER INSURANCE
If you have other insurance which applies to a claim covered by this policy, this policy will be excess over any other valid and collectible insurance, whether the other insurance is primary, pro rata, contributory, excess, contingent or on any other basis. However, if the other insurance is written to apply as specific excess insurance over this policy’s limit of liability, or the other insurance is an extended reporting period endorsement that we issued, this policy will be primary.

If a claim occurs involving two or more policies, each of which provides that its insurance will be excess, then each policy will contribute on a pro rata basis. This means that we will not pay more than our percentage of the total amount of the insurance covering the claim, less the deductible.

5. ASSIGNMENT
You may not assign this policy to any other person or entity without our written consent.

6. CANCELLATION OR NONRENEWAL
You or your personal representative may cancel this policy at any time by mailing or delivering to us or any of our authorized agents advance written notice of cancellation. We will refund the excess of paid premium or assessment above the pro rata rates for the expired time.

We may cancel this policy by mailing to your last known address, with postage fully prepaid:

a. ten (10) days’ written notice of cancellation for nonpayment of premium or deductible; or
b. thirty (30) days’ written notice of cancellation for reasons other than nonpayment of premium; and
c. whether or not we offer a return of unearned paid premium or assessment.

The minimum earned premium will be the pro rata premium for the expired time or $25.00, whichever is greater.

If we decide not to renew this policy, we will mail written notice to you at least thirty (30) days before the expiration date. Changes in the terms available on renewal will not be considered a nonrenewal of this policy.

7. RENEWAL
We may offer to renew this policy at the terms and rates applicable at the expiration date. We will not amend the retroactive date(s) during a period of continuous coverage.

8. POLICY DISPUTES
If there is a dispute between you and us in the interpretation, validity, construction or enforceability of this policy, the dispute will be referred to non-binding arbitration prior to the initiation of any legal proceeding. We both agree to meet with a qualified arbitrator in a good faith effort to negotiate a resolution of the dispute. The arbitration will follow the rules of the American Arbitration Association, and will continue until the dispute is resolved; or the arbitrator notifies both of us that it is unlikely that the dispute will be resolved through arbitration; or any party elects, after a minimum of 30 days after the first arbitration session, to end the arbitration.

9. LOSS INFORMATION
We will provide you with loss information, including losses paid, loss reserves, claim expenses paid, claim expense reserves, and the balance of the limit of liability remaining on the policy upon your written request.

10. CONFORMANCE TO STATUTE
The terms of this policy which are in conflict with the statutes of the state in which this policy is issued are amended to conform to those statutes.

11. PREMIUM PAYMENT
This policy will not be effective unless you have paid the premium due, and we have received the completed application by the Policy Effective Date shown on the Declarations.

12. LIBERALIZATION
If we adopt any revisions to the terms and conditions of this policy form to provide more coverage without an additional premium charge during the policy term, the broadened coverage will immediately apply. However, the broadened terms and conditions will not apply to any claims that were first made against you prior to the effective date of the revision.

13. NAMED INSURED AS AGENT FOR ALL OF YOU
The Named Insured will be the sole agent of all of you as respects the acceptance or giving of any notice, the exercising or waiving of any right available under this policy, the payment or receipt of premiums or return premiums, and the cancellation of this policy.

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