Attorney’s malpractice cover limited because only one claim (US)

Patrick Bracher from Norton Rose Fulbright.

An attorney’s professional indemnity policy had a per-claim limit of $500 000 and an aggregate limit of $1 million.

The attorney lost a $525 000 malpractice suit after a former client blamed the lawyer for being ousted from his company.

A claim was defined as a ‘demand made upon any insured for loss in service of a suit’. There were various malpractices by the attorney leading to the dismissal of the client from his company. The claim stemmed solely from the attorney’s negligent representation of the client in relation to a particular job and constituted a single claim under the insurance policy.

There are many different versions of what is a ‘claim’ under a policy and the definition of a claim requires careful drafting in any kind of insurance.

(Westport Insurance Corp. v Mylonas et al., case number 2:14-cv-05760, in the U.S. District Court for the Eastern District of Pennsylvania)

First published by Financial Institutions Legal Snapshot.