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’. Even though the Everest Insurance policy’s malpractice coverage is ‘Duty to Defend’, the disciplinary coverage is ‘Reimbursement’. Policy wording for disciplinary coverage and reporting differs by carrier. The disciplinary reimbursement is not subject to the policy deductible.
Declarations Page:
B. DISCIPLINARY PROCEEDINGS EXPENSES
1. Each Disciplinary Proceeding $25,000
2. All Disciplinary Proceeding Expenses $50,000
Policy Coverage:
B. DISCIPLINARY PROCEEDINGS EXPENSES
The Insurer will reimburse the Insured for all Disciplinary Proceeding Expenses incurred in connection with all Disciplinary Proceedings first commenced against an Insured during the Policy Period, subject to the Sublimits of Liability referenced in ITEM 5.B of the Declarations. The Insurer shall not pay and there shall be no coverage for any fines, judgments, awards or settlements in connection with any Disciplinary Proceeding.
Policy Definition:
H. Disciplinary Proceeding means a formal investigation or proceeding regarding an Insured’s adherence to professional standards of conduct before a court, state licensing board, peer review committee, bar association or other regulatory body.
Disciplinary Proceeding does not include any: (i) criminal proceedings or proceedings or hearings to determine the reasonableness of, or right or entitlement to, any fees or charges by any Insured, or (ii) any subpoena otherwise covered under Section II.D of the Policy.
I. Disciplinary Proceeding Expenses means reasonable and necessary fees, costs and expenses incurred for legal work performed by attorneys other than any Insured, in connection with Disciplinary Proceedings.
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