Do in-house counsel need their own malpractice insurance?

In-house counsel occupy a unique position in the legal malpractice insurance landscape. Unlike private practice attorneys, they typically do not purchase individual malpractice policies. Instead, their protection comes from a combination of corporate indemnification and the company's D&O insurance.

Corporate indemnification is usually the first line of defense. Most corporations indemnify their in-house attorneys for claims arising from their employment, including legal malpractice claims. However, this protection depends on the corporation's ability and willingness to pay. If the company becomes insolvent or if the claim involves conduct outside the scope of employment, indemnification may not be available.

The company's D&O insurance typically extends to in-house counsel as officers or employees of the corporation. This coverage applies when a third party sues the in-house attorney for errors in their professional capacity. However, D&O policies have exclusions — particularly for criminal conduct, personal profit, and deliberately fraudulent acts — that may leave gaps.

Several scenarios warrant personal malpractice coverage for in-house counsel. If you provide legal services to anyone outside your employer — even occasional advice to friends or family — those services are likely not covered by your employer's insurance. If you serve on outside boards or committees, you may need separate coverage for those roles. If your state requires all licensed attorneys to carry malpractice insurance (Oregon, Idaho), you must comply even as in-house counsel.

In-house counsel who are considering a transition to private practice should plan their insurance carefully. They will need to obtain individual malpractice coverage, and the retroactive date on their new policy should ideally extend back to cover any legal services they provided while in-house that were outside the scope of their employment.