AIM Newsletter - Vol. XVII, No. 2 Fall 2007: Ask the Underwriter

Q.	Do engagement letters help in the defense of a malpractice claim?
A.	Using engagement letters can be crucial to malpractice avoidance. Legal malpractice claims can be successfully defended when production of an engagement letter can establish the defined and limited responsibilities of a lawyer to a client. The initial interview with a client should always be followed by an engagement letter setting out the scope of representation .

Q.	What are the consequences of gaps in coverage under "claims-made" policies?
A.	There is no coverage if a suit is filed against the attorney while the policy has lapsed. If you obtain coverage in the future, coverage for acts, errors or omissions may not be provided for an act, error or omission prior to the gap in coverage. We recommend firms have an agreement with its members regarding purchase of tail coverage in the event of the dissolution. Replacing your policy on time prevents a gap in coverage.

Q.	If a new attorney is hired by a firm after coverage is placed with AIM, how do I get coverage for the new attorney?
A.	AIM's policy provides automatic coverage for hiring a new attorney during the policy period. The new attorney should be reported promptly to AIM and in no event later than the next anniversary date of the policy. There is no additional premium for the new attorney until the next year's replacement policy. Attorneys added mid-term have coverage, but are not "members" of AIM. This means they do not have voting rights or the right to purchase tail coverage.