Does malpractice insurance cover mediation and arbitration services?

Many attorneys serve as mediators or arbitrators in addition to their advocacy practice, and the insurance coverage for these neutral roles is not straightforward. The key distinction is between representing a client in mediation or arbitration, which is clearly covered as professional legal services, and serving as the neutral mediator or arbitrator, which some policies treat differently.

When you represent a client in a mediation or arbitration proceeding, your malpractice policy covers this work just as it would cover courtroom litigation. Errors in preparation, strategy, advice, or execution during ADR proceedings are covered claims if they result in harm to your client.

When you serve as the neutral, however, coverage analysis becomes more nuanced. Some malpractice policies define covered professional services broadly enough to include all activities that require a law license, which would encompass serving as a mediator or arbitrator. Other policies specifically exclude claims arising from neutral services, on the theory that serving as a mediator or arbitrator is fundamentally different from representing a client. A few carriers offer specific endorsements for ADR neutral services.

If you serve as a mediator or arbitrator regularly, review your policy language carefully. If neutral services are excluded or not clearly covered, consider purchasing a separate mediator's or arbitrator's professional liability policy. These specialty policies cover claims alleging bias, procedural errors, failure to disclose conflicts, breach of confidentiality, and other wrongful acts in the neutral role. ADR organizations like the American Arbitration Association may offer group coverage programs for their panel members. The cost of a separate ADR neutral policy is typically $500 to $2,000 annually for reasonable limits.