For years, some lawyers have been told that using TitlePLUS could negatively affect their LAWPRO mandatory E&O insurance because TitlePLUS is affiliated with LAWPRO.
The suggestion is that this relationship gives LAWPRO insight into a lawyer’s practice and could ultimately impact their coverage, claims history, or premiums.
It’s a persistent myth. And it’s simply not true. To understand why, it helps to look at how TitlePLUS Legal Service Coverage works and how covered claims are handled.
How TitlePLUS Legal Service Coverage Works
Included in most TitlePLUS policies at no additional charge, Legal Service Coverage responds to losses arising from a lawyer’s negligence in providing legal services related to a real estate transaction. Just as importantly, it gives clients a direct avenue to compensation through TitlePLUS. If a covered loss occurs, the client submits a claim directly to TitlePLUS, rather than pursuing a negligence claim against their lawyer. That distinction matters because it can help shift the focus from litigation against the lawyer to resolving the client’s loss.
Not All Legal Service Coverage Works the Same Way
Many lawyers are unaware that legal service coverage can operate differently depending on the title insurer. Under some competing products, the lawyer’s LAWPRO E&O insurance may need to respond before coverage becomes available under the title insurance policy. While the title insurer may reimburse costs such as deductibles or claims levy surcharges, the matter still involves the lawyer’s professional liability insurer before the title insurer’s coverage responds. In those circumstances, the client’s path to recovery may begin with a claim against their own lawyer. That can be stressful for everyone involved and may place significant strain on the lawyer-client relationship.
TitlePLUS takes a different approach.
When a covered loss falls within Legal Service Coverage, the client submits a claim directly to TitlePLUS. The lawyer’s LAWPRO policy is not engaged or impacted because a TitlePLUS claim has been made.
Why This Matters
Legal Service Coverage can respond to a variety of legal service errors, including:
- Errors in drafting or reviewing an Agreement of Purchase and Sale
- Failing to disclose material information to a lender
- Applying for the wrong type of title insurance policy
- Incorrect advice regarding taxes or tax consequences
- Errors in documenting undertakings, warranties, or other transaction documents
Whether it’s an incorrect legal description that results in the purchase of the wrong condominium unit or a failure to follow a client’s financing instructions, Legal Service Coverage was designed to help address these types of losses.
Myth vs. Reality
The misconception that using TitlePLUS allows LAWPRO to monitor lawyers’ mistakes or negatively impact their mandatory E&O insurance continues to circulate in the marketplace. The reality is that a TitlePLUS claim is handled under the TitlePLUS policy and does not negatively impact a lawyer’s LAWPRO coverage.
Understanding how TitlePLUS Legal Service Coverage operates, and how it differs from some other offerings in the marketplace, helps lawyers make informed decisions about the title insurance products they choose.
