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 StarStone National malpractice coverage is ‘Duty to Defend’, the disciplinary coverage is ‘Reimbursement’. Policy wording for disciplinary coverage and reporting differs by carrier. The disciplinary coverage is not subject to the policy deductible.
Policy Coverage:
B. Supplementary Payments
2. Up to $25,000 for attorney fees, and other costs, expenses or fees resulting from the investigation or defense of each proceeding before a state licensing board, local disciplinary board, self-regulatory agency, ethics commission or governmental regulatory body incurred as the result of a notice of a proceeding, first received by the Insured and reported to the Company during the Policy Period, that arises out of any act, error, omission or Personal Injury happening on or after the Retroactive Date in the rendering of or failure to render Professional Services by an Insured covered under this policy. The total amount so payable shall in no event exceed $100,000 for all such proceedings covered hereunder; and
3. Up to $5,000 in the aggregate for awards granted during the Policy Period under Rule 11 of the Federal Rules of Civil Procedure.
Definitions:
H. Personal Injury means:
1. False arrest, detention or imprisonment, wrongful entry or eviction, other invasion of private occupancy or malicious prosecution; or
2. The publication or utterance of a libel, slander or other defamatory or disparaging material, or a publication or an utterance in violation of an individual’s right of privacy.
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