Insurance Policy Responds to New In-House Attorney Vulnerabilities
WARREN, NJ, August 11, 2005 - The Chubb Group of Insurance Companies has enhanced its Employed Lawyers Professional (ELP)
Liability Insurance program to help protect a company's in-house attorneys from certain new exposures related to violations
of securities and Sarbanes-Oxley legislation as well as risks emanating from select pro bono work and "moonlighting" authorized
by the company.
"The in-house counsel of public, private, and not-for-profit companies are increasingly vulnerable to lawsuits," said Laurie
Sablak, assistant vice president, Chubb & Son, and professional firms employment practices liability insurance and employed
lawyers professional liability product manager for Chubb Specialty Insurance. "Many companies don't realize that the actions
of their in-house counsel, as well as their legal staffs and independent contractor attorneys, may fall into a coverage gap
that exists in their standard directors and officers liability insurance policy and their professional liability insurance
policy."
Common law practices, such as opinion letters related to a company's financial status, assistance with downsizing plans, filings
made with regulatory boards and agencies, representations made to third parties during litigation, and conflicts of interest,
can all expose in-house counsel to serious lawsuits.
Sablak estimates that little more than five percent of U.S. companies purchase insurance to fill this coverage gap. "In-house
counsel are beginning to be named in Sarbanes-Oxley related actions, and there is a growing concern about this coverage gap
among legal staffs across the country," Sablak said. "Purchasing the proper insurance protection to help fill this coverage
gap can help protect a company from the economic devastation of a liability lawsuit. In addition, companies that demonstrate
an understanding of today's exposures and the solutions may have better success in recruiting and retaining the finest legal
staffs.
Chubb's ELP insurance now provides new coverage enhancements including:
-
Full House Endorsement - Expands coverage to include approved pro bono work and the legal staff of in-house counsel and independent
contractor attorneys while they perform legal services for the company. In addition, the definition of "loss" now includes
punitive and exemplary damages, where permitted by law.
-
SEC and Sarbanes-Oxley Endorsement - Amends coverage for wrongful acts (any actual or alleged act, error, omission, breach
of contract or duty, or libel and slander) to include any violation of the Sarbanes-Oxley Act of 2002.
-
Moonlighting Endorsement - Protects employed lawyers who perform various company-approved legal services such as estate administration,
incorporation of a family business or residential real estate closings.
-
Choice of Counsel - Allows the insured in-house counsel the right to choose their legal counsel in the event of a claim.
Chubb is a leading provider of specialty liability insurance products for lawyers, directors and officers, and many other
professionals in public, private and not-for-profit companies. Chubb's ELP liability insurance policy is sponsored by the
Association of Corporate Counsel, the largest U.S. organization of in-house counsels. The member insurers of the Chubb Group
of Insurance Companies form a multi-billion dollar organization providing property and casualty insurance for personal and
commercial customers worldwide through 8,000 independent agents and brokers. Chubb's global network includes branches and
affiliates in North America, Europe, Latin America, Asia, and Australia.
|
