More than a few attorneys forget to take advantage of Disciplinary Coverage until it is too late. Attorney Malpractice Insurance policies that offer this coverage can be ‘Duty to Defend’ or ‘Reimbursement’. The Wesco Insurance disciplinary coverage is ‘Duty to Defend’. Policy wording for disciplinary coverage and reporting differs by carrier. The disciplinary coverage is not subject to the policy deductible.
Policy Coverage:
III. LIMITS OF LIABILITY AND DEDUCTIBLE
E. Disciplinary Proceedings
The Company will provide for the defense of a disciplinary proceeding brought against an Insured during the policy period arising out of the performance of legal services, provided that prior to the inception date of the policy period, or if this policy has been continuously renewed, prior to the inception date of the first policy issued by the Company, no Insured received notice, or knew about any bar complaint, grievance or investigation that might be expected to be the basis of a disciplinary proceeding. The Company’s obligation under this provision is subject to a maximum amount of $25,000 per disciplinary proceeding and $50,000 in the aggregate per policy period for all attorney fees and other reasonable costs, expenses or fees incurred by lawyers appointed by the Company. There will be no deductible for payments made under this provision and any such payments are in addition to the Limits of Liability.
Definitions:
J. “Disciplinary proceeding” means any proceeding before a state or federal licensing board or a peer review committee to investigate charges alleging professional misconduct.
Not taking advantage of this policy coverage does not make sense. Firms have a fear that reporting disciplinary complaints can impact their attorney malpractice insurance premiums. While too many disciplinary reported complaints that do not result in an issue can cause problems. Not reporting issues that may lead to a proceeding may impact your malpractice insurance should the same issue turn into a malpractice claim at a later date. The other issue is that once a year you may need to attest on the renewal application about disciplinary issues.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080