There has been some recent press around the investigative powers of the SRA and whether the cost of representation through such examinations might be covered under D&O (Management Liability Policies).
The Lockton Management Liability for Law Firms product provides coverage for losses sustained by a firm's partners, whether indemnified by the partnership or not. Coverage is on an all wrongful acts basis for those allegations that are not specifically excluded. We have incorporated defence costs, investigation costs, punitive damages where insurable, pre-and post-judgments, and awards of costs or settlements.
Who is an insured within the policy?
Any person serving on the Partnership Executive committee or similar;
The Chief Operating Officer, any Business Service Director, or General Counsel
The Compliance Officer for Legal Practice (COLP), the Compliance Officer for Finance and
Administration (COFA) and a Money Laundering Reporting Officer (MLRO);
Any person of the Limited Liability Partnership according to the Limited Liability Partnership
Act 2000, who is acting as a manager or sitting on any management committee of the
Limited Liability Partnership;
Any non-executive person of the Partnership Executive committee attending Partnership
Executive committee meetings on an occasional basis;
The spouse or domestic partner or the administrator, heirs, legal representatives, or
executor of a deceased, incompetent, insolvent or bankrupt of any Insured Person;
An employee of the Limited Liability Partnership with respect managerial duties, co-defendant status, or when performing controlled functions within the Financial Services and
Markets Acts 2000 or the SRA regulated COLP, COFA and MLRO positions.
What is excluded?
There are four exclusions to consider:
Conduct – intentional fraud or illegal profit, once proven at final adjudication
Prior Claims or Circumstances
Claims brought from the United States
Claims and investigations arising from the firm's provision of Professional Services - However, Importantly the Management Liability policy would cover the representation of a firms Officers (COLP, COFA, CISO and MLRO etc) and the Management for the failure to supervise the firm's conduct in the provision of Professional Services
Employment Practices Coverage Extension
The Lockton product can be extended to protect the partnership against:
Allegations of wrongful employment practices.
Claims alleging harassment, discrimination (whether sex, race, age, disability
or other legally protected class), failure to make partner, breach of employment agreement
All of the above are financially damaging exposures that can be mitigated through an EPL policy. Coverage on this basis is subject to an additional premium and can be negotiated as an option