Posted Feb 18, 2014 06:45 pm CST
A malpractice exclusion in a law firm’s director’s and officer’s liability insurance policy did not excuse the carrier from providing a defense in a lawsuit against the firm over its alleged deceptive advertising, a federal judge has ruled.
Finding that the exclusion, as interpreted by the insurer, would largely eliminate the coverage provided by the D&O policy, U.S. District Judge John J. McConnell Jr. said Travelers Casualty & Surety Co. of America must defend Rob Levine & Associates in the underlying lawsuit filed by two former clients that is at issue in the Rhode Island declaratory judgment case. The ex-clients contended that the firm, which uses the tagline “Call A Heavy Hitter® Today!” in its television and Internet advertising, falsely claimed to have specialized expertise and abilities, Wiley Rein LLP notes in a Lexology post.
Denying summary judgment to Travelers and granting summary judgment to the law firm in an opinion (PDF) filed Feb. 3, the court distinguished between advertising and legal services and said the exclusion does not apply to advertising. The relevant language in the malpractice exclusion states that Travelers “will not be liable for loss for any claim based upon or arising out of any wrongful act related to the rendering of, or failure to render, professional services.”
But “because the claim is not related to the rendering of professional services,” McConnell wrote, “the exclusion does not apply, and the insurer has the duty to defend.”
Rhode Island law is applied.