Seventh Circuit Decision In Koransky Bouwer Enforces Professional Liability Reporting Requirements

Earlier this month, the 7th Circuit affirmed a district court order that held an insurer properly denied coverage to the insured law firm based on its failure to comply with the reporting requirements under its claims-made professional liability policy. Koransky, Bouwer & Poracky, P.C. v. The Bar Plan Mutual Insurance Co., No. 12-1579, 2013 U.S. App. LEXIS 6558 (7th Cir. Apr. 2, 2013). This decision cautions lawyers to consider carefully the circumstances in which the provision of legal services may give rise to a claim for legal malpractice.

The underlying litigation arose out of the law firm's representation of a potential buyer in the purchase of a Rite Aid drugstore in Ohio. The law firm of Koransky Bouwer drafted and executed a sales contract on behalf of the buyer and sent the seller's counsel a copy of the agreed-upon contract. The seller executed and returned the contract on January 31, 2007, and the buyer executed the contract on February 9, 2007. On February