When you are negotiating the terms of an insurance policy for your business, it is essential to negotiate a Choice of Counsel Endorsement into every insurance policy. You may not be thinking about hiring a specific attorney or firm in the event that your business faces a lawsuit at the time you are developing an insurance policy or renewing your business’s General Liability (GL) or Employment Practice Liability Insurance (EPLI) policy. However, being able to select your own counsel in the event of an employment lawsuit or an insurance claim is extremely important. Without a Choice of Counsel Endorsement, you can lose the ability to choose the right lawyer for your business, and you may be required to select from a list of attorneys that the insurance company has already approved.

In short, you do not want to agree to a business insurance policy until you have negotiated a Choice of Counsel Endorsement. The following is detailed information about why a Choice of Counsel Endorsement is important and how to include one in your insurance policy.

What Is a Choice of Counsel Endorsement?

Businesses purchase insurance policies to ensure that they are covered in the event of a lawsuit. However, when a business is facing a claim against it and turns to its General Liability or EPLI policy for coverage to avoid litigation, it may turn out that the business and the insurance company have very different ideas about how to move forward with the claim. To be sure, the interests of a business and an insurance company can vary widely, and it is important for the business to be able to retain some control over the claims process. One way to do this is for the business to be able to choose its own counsel. However, unless you have expressly negotiated a Choice of Counsel Endorsement, your business could be forced to select from a list of counsel pre-approved by the insurance company.

Facing a lawsuit can put your entire business at risk. You will want to be able to select an attorney who has knowledge of your business and has experience handling cases involving the particular legal issue your business is facing. For instance, if you are relying on your EPLI policy to settle a discrimination claim or a wrongful termination claim against your business, you will want to be certain that you can choose an attorney with experience handling discrimination claims or wrongful termination claims against businesses like yours. The Choice of Counsel Endorsement is a clause in your insurance policy that allows you to choose your own lawyer, according to the American Bar Association.

What Do to for a Choice of Counsel Endorsement

Now that you know your business needs a Choice of Counsel Endorsement, how do you get one? You should begin by understanding your insurance policy and any terms related to the selection of counsel. Whether you are creating a new policy or renewing an existing one, any language in the policy that prohibits the business from choosing its own attorney means that you will need to add a Choice of Counsel Endorsement to your insurance policy.

The Choice of Counsel Endorsement will make clear that your business, as the insured under the policy, has the right to select its own counsel if your business faces a lawsuit. Sometimes a Choice of Counsel Endorsement may include some limits for selecting the attorney, such as counsel within a particular geographic area.

If you have questions about renewing your business insurance policy and adding a Choice of Counsel Endorsement, you should get in touch with an experienced business law attorney at Wells Law, LLC for assistance.