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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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Failing to check whether the claim against your client might be covered by insurance can get you in hot water &mdash; or at least keep you there, preventing a speedy exit from a malpractice suit, as a Florida lawyer recently learned.
In <a href="https://ecf.flsd.uscourts.gov/doc1/051113965216">Pharma Supply, Inc. v. Stein</a>&nbsp;(PACER access ID required), the client alleged it retained the lawyer to &ldquo;defend its interests&rdquo; in the underlying suit. &nbsp;At the time, the client had an active insurance policy that would have provided coverage and a defense in the underlying case. &nbsp;The lawyer, however, allegedly failed to review the client&rsquo;s insurance policies, and didn&rsquo;t place the insurer on notice. &nbsp;Later, the insurer joined the client&rsquo;s defense, but refused to reimburse the client for fees and expenses paid before then. &nbsp;The client subsequently sued the lawyer and his firm in federal district court for professional negligence, among other things.
In their motion to dismiss, the lawyer &nbsp;and his firm contended that they had been retained solely to defend the client in the underlying case, and that failing to inquire into the client&rsquo;s insurance coverage did not breach a duty to the client.
The court rejected that argument. &nbsp;It ruled that&nbsp;the former client&rsquo;s allegation that it had retained the lawyer and his firm to &ldquo;defend its interests&rdquo; was enough to survive a motion to dismiss. &nbsp;A duty to defend the client&rsquo;s interests could also encompass developing claims against third parties, such as the insurer, that might owe indemnification to the client, the court said. &nbsp;Indeed, the court said, opinions from some jurisdictions have suggested that
<blockquote>
[I]n certain circumstances a litigation attorney may have a duty to inquire into a client&rsquo;s own insurance coverage as a way to provide for alternative recovery or soften the impact of the litigation.
</blockquote>
Cases decided in <a href="http://law.justia.com/cases/california/cal4th/18/739.html">California</a>, <a href="http://law.justia.com/cases/georgia/court-of-appeals/1991/a90a1864.html">Georgia </a>and <a href="http://law.justia.com/cases/alaska/supreme-court/2003/s-10229-1.html">Alaska </a>for example, point to such a duty, as does a recent <a href="http://www.courts.state.ny.us/reporter/3dseries/2013/2013_06171.htm">New York Appellate Division</a> case. &nbsp;(In a different&nbsp;<a href="http://law.justia.com/cases/new-york/court-of-appeals/2000/95-n-y-2d-308-0.html">case</a>&nbsp;in 2000, however, the New York Supreme Court&nbsp;held that a lawyer did not have a duty to advise the clients about a &ldquo;novel and questionable theory pertaining to their &nbsp;insurance coverage.&rdquo;)
The defendants in the Pharma Supply case have moved for reconsideration of the court&rsquo;s ruling denying their motion to dismiss; that motion, converted by the court to a motion for summary judgment,&nbsp;remains pending.
One way to address the issue of client insurance is to raise it in your engagement letter. &nbsp;Asking the client in writing to inform you if there might be insurance that would cover the claim can help identify and resolve any concerns at the front end of a matter.
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Ethics

Legal Ethics, Professional Responsibility and the Business of Law

Reminder:  check for client’s insurance, or you may be liable for malpractice