Attorney Malpractice Fees/Punitive Damages Excluded? – General Star

August 23, 2023

General Star National Attorney Malpractice Specimen Policy

Attorney Fees are almost universally excluded from the definition of damages in attorney malpractice policies.  Punitive damages may or may not be excluded from malpractice coverage, but still may not be permitted by your state.

Your insurer may pay defense costs and the award for damages in a covered malpractice claim.  Fees and sanction awards are another matter.  Fees or sanction awards often exceed the value of the underlying claim.  Awarded punitive damages could dwarf the underlying case.

The time to check for coverage is not after the punitive damage award.  So how can you determine whether a particular malpractice insurance policy covers punitive damages?  Punitive damage awards are normally awarded for egregious acts some malpractice policies provide coverage other policies exclude the coverage.  Just because it is excluded does not mean you will find it in the ‘exclusion section’. The more common place to find the punitive damages ‘exclusion’ is in the damages definition.  In the General Star National policy it is the definition of damages:

III.        DEFINITIONS  

F. Damages mean the monetary portion of any judgment, award or settlement, including any punitive or exemplary damages if insurable under the applicable law most favorable to the insurability of punitive or exemplary damages, provided always that Damages shall not include:

1.     taxes, civil fines, criminal fines, sanctions, fees, restitution or penalties imposed by law, statute, regulation or court rule, or any amount awarded in a Disciplinary Proceeding;

2.     punitive or exemplary damages if deemed uninsurable under applicable law, and the multiplied portion of any multiplied damages award;

3.     the cost to comply with any form of injunctive or other non-monetary or declaratory relief;

4.     any amounts payable by any Insured for, or for the return of, fees, commissions, profits or charges for services or consideration; or

5.    Claim Expenses.

Click here for Punitive/Compensatory Damages Allowed by State

                               CLICK HERE TO OBTAIN AN ATTORNEY MALPRACTICE QUOTE

This blog is an excerpt from the policy.  The complete policy along with applicable endorsements could impact the information provided above.

 

Lee

 
 
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   Lee Norcross, MBA, CPCU
   California License # 0D87292
    L Squared Insurance Agency, LLC ® DBA in California as
   L2 L Squared Insurance Agency, License # 0L93416

    Managing Director, CEO
   

     (616) 940-1101 Ext. 7080

 

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