How does malpractice insurance cover contract attorneys?

The use of contract attorneys has grown significantly, but insurance coverage for these arrangements is not automatic. Whether a contract attorney is covered under your firm's malpractice policy depends on how the policy defines insured persons and whether the contract attorney qualifies under that definition. Some policies cover any attorney performing services on behalf of the firm, while others limit coverage to employees, partners, and specifically named individuals.

Best practice is a two-layer approach. First, require contract attorneys to maintain their own malpractice insurance with limits appropriate to the work they will perform for your firm. Request a certificate of insurance before they begin work. Second, confirm with your malpractice carrier that the contract attorney's work on your firm's matters is covered under your policy. If the policy does not automatically extend coverage, request an endorsement adding contract attorneys as insureds.

The distinction between an independent contractor and a temporary employee matters for insurance purposes. If the contract attorney works under your firm's direct supervision, uses your firm's resources, and appears to clients as a member of your firm, courts may treat them as your employee regardless of the contractual designation. This means your firm could be vicariously liable for their errors even if the contract characterizes the relationship otherwise.

Your engagement agreement with the contract attorney should include indemnification provisions, require them to maintain specified insurance coverage, and address who is responsible for claims arising from their work. If a contract attorney is performing document review, legal research, or drafting under an attorney at your firm who reviews and signs off on the work, your supervising attorney's coverage typically applies, but the contract attorney remains a potential source of errors that could generate claims against the firm.