Lawyer acting as mortgage broker denied insurance coverage

In April of 2012, a Connecticut appellate court ruled that an exclusion in a lawyers professional liability insurance policy was strong enough to preclude the insurance company from providing a defense in a lawsuit.   The lawsuit alleged that a lawyer made errors while acting both as a lawyer and as a mortgage broker in a real estate transaction.  The lawyer was also the owner of a mortgage brokerage and was representing both sides of a transaction at the time of the alleged wrongdoing.  The exclusion stated that any “activities as an officer, director, partner, manager, or employee of any company, corporation, operation, or association” other than the named insured would be excluded.

This highlights the need for a firm to understand exactly what is covered and what is NOT covered under their professional liability insurance.  Calculated Risk Advisors warns that an improper understanding of their insurance may lead to a gap in coverage.  Contact a broker at today for an in-depth coverage analysis of your firm’s activities and insurance needs.