An application for lawyer’s professional liability insurance typically asks whether you have any “office sharing” arrangement with any other lawyers or law firms. If you answer in the affirmative, the policy will likely include an office-sharing exclusion by endorsement.
The following is typical exclusion language: “This policy does not apply to any Claim based upon, arising out of, or in any way involving any lawyer sharing common or adjacent office facilities, offices, office space or staff that is not a partner, associate, of counsel, or a temporary or leased professional, for the Named Insured.”
Space sharing creates a heightened risk the insured will get sued for something a non-insured, space-sharing attorney did, perhaps on an implied partnership, apparent agency, or other creative theory. The exclusion is aimed at two things: first, making clear there is no coverage for the non-insured, space-sharing attorney; and, second, eliminating coverage for a claim against the insured arising out of the other attorney’s legal work.
Where the exclusion can be problematic is in collaborative situations, such as the office-sharing attorneys co-counseling a matter together, which is not unusual. The broad wording of the exclusion arguably defeats coverage for a claim against the insured based on his or her legal work because of the non-insured, office-sharing attorney’s involvement in the matter.
One carrier that we spoke with about the exclusion indicated that, in an intra-office, co-counseling situation, a claim against an insured arising out of his or her own legal work would be covered. We made sure to get this in writing to protect the insured.
