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 ProAssurance policy are:
SECTION 5. LIMIT OF LIABILITY
5.4. DEDUCTIBLE
The Deductible amounts shown in Item 5 of the Declarations apply to each claim and in the Aggregate for the policy period and are in excess of the Limit of Liability shown in Item 4 of the Declarations. The Per Claim Deductible applies to the sum of all damages and claim expenses and shall be paid by the Named Insured within thirty (30) days of written demand. The Aggregate Deductible amount is the most the Named Insured shall pay for the sum of all damages and claims expenses for all claims first made and reported to the Company during the policy period or an extended reporting period. In the event the Company in its sole discretion pays on behalf of an Insured all or part of the Deductible, the Named Insured shall reimburse the Company for the amount of the payment within thirty (30) days after written demand. The Named Insured agrees to pay all costs, including attorneys’ fees and court costs, incurred by the Company in collecting any reimbursement.
5.5. MEDIATION
If any claim covered under this policy is resolved through the use of formal mediation within six months from the date it is first reported to the Company or within ninety (90) days after suit is filed, the Deductible amount the Named Insured is obligated to pay will be reduced by fifty percent (50%), or by $20,000, whichever is less.
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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