Attorney Fees are almost universally excluded in the attorney malpractice policy damages definition. Punitive damages may or may not be excluded from malpractice coverage, but your state may not permit.
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. In the Zurich policy the definition of damages excludes punitive damages:
VIII. DEFINITIONS
F. Damages means the monetary and compensatory portion of any judgment, award or settlement, provided such settlement is negotiated with the assistance and approval of the Company. Damages do not include:
1. Compensation for bodily injury, sickness, disease, death of any person, emotional distress or other emotional judgments or awards;
2. Compensation for injury to or destruction of tangible property or loss of use or value thereof;
3. Personal profit or advantage to which any Insured was not legally entitled;
4. Criminal or civil fines, penalties (statutory or otherwise), fees or sanctions imposed by law, regardless of whether such fines, penalties, fees or sanctions are paid or to be paid to a government entity or to natural persons;
5. Punitive, exemplary or multiple damages;
6. Matters deemed uninsurable;
7. Legal fees, costs and expenses paid to or incurred or charged by the Insured, no matter whether claimed as restitution of specific funds, forfeiture, financial loss, setoff or otherwise, and injuries that are a consequence of any of the foregoing; or
8. Any form of equitable or non-monetary relief.
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 Norcross, MBA, CPCU, CPIA
Managing Director, CEO
(616) 940-1101 Ext. 7080