The reality of attorney malpractice insurance policies is paying the deductible when a claim is made against the law firm. For an additional premium Insurers may offer for 1st dollar defense which addresses claims expenses for claims with no indemnity payment made or an aggregate deductible for multiple claims brought in any one policy year. But insurers may also have features built into their policies that reduce your deductible obligation. Valuable policy features mean that there is more than policy premiums that should be compared prior to making an insurer coverage decision. As every law firm is unique, policy features important to one insured are not important to another insured.
Deductible reducing features with the ISMIE policy are:
II. LIMITS OF LIABILITY AND DEDUCTIBLE
B. Deductible
The Insurer shall only be liable for amounts payable under this policy for Damages or Defense Expenses which are in excess of the Deductible amount shown in Item 4. of the Declarations. This Deductible amount shall:
1. apply separately to each and every Claim;
2. be borne by the Insured; and
3. remain uninsured.
The Deductible amount applies to the payment of Damages and Defense Expenses. If the Insurer advances any amounts within the Deductible, the Named Insured shall reimburse the Insurer within 30 days of the Insurer’s request to do so. In the event of Related Claims, a single Deductible amount will apply.
III. EXTENSIONS OF COVERAGE
E. Deductible Credit for Mediation Extension
If:
1. mediation of a Claim takes place either without institution of an arbitration proceeding or service of suit within 60 days of the institution of such proceedings or service of suit; and
2. such Claim is ultimately resolved for an amount acceptable to the Insured and the Insurer by the process of mediation, the Insured’s Deductible applying to the Claim will be reduced by the lesser of 50% or $25,000.
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This blog is an excerpt from the policy. The complete policy along with applicable endorsements could impact the information provided above.
Lee Norcross, MBA, CPCU, CPIA
Managing Director, CEO
(616) 940-1101 Ext. 7080