Legal Malpractice insurance is a vital component of doing business in New York.  What attorney goes to sleep comfortably without it?  Yet, carriers are always looking for a way out.  Here is an example of the latest twist in NJ from Law.Com:

"A legal malpractice carrier is taking a hard line on the level of client grumbling that puts a lawyer on notice of a potential claim that must be reported.

The carrier’s declaratory judgment suit, filed Tuesday in federal court in Trenton, N.J., could cause sleepless nights for any lawyer who has ever had to deal with a client disappointed by the outcome of a case.

General Star National Ins. Co. says a lawyer’s silence about a client’s displeasure over the size of a settlement offer in a wrongful-death case and her threat to consult with separate counsel was enough to void malpractice coverage.

The carrier cites language in its policy, common to legal malpractice policies, that defines a claim to include "knowledge by an insured of any event or circumstance which could reasonably be expected to result in or lead to a claim being asserted against an insured, provided that the insured gives the company written notice of such event or circumstance prior to the termination date of the policy period .  William Voorhees Jr. of Morristown, N.J., says:""The prior knowledge exclusion is the exclusion du jour of the insurance industry," he says. "The denial of claims because of the prior knowledge exclusion has increased dramatically in the past four to five years. It is working, if for no other reason than it has the factual effect of driving down the malpractice plaintiff’s demand."