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 Swiss Re Insurance 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:
II. SUPPLEMENTAL COVERAGES
For the Supplemental Coverages described in this Section II, unless otherwise indicated, the Company shall reimburse the NAMED INSURED up to $125,000 in the aggregate, or up to the remaining per claim Limit of Liability, whichever is less (“Supplemental Coverages Aggregate Limit”). Any payments made by the Company for Supplemental Coverages shall be included within the applicable limit of liability and not in addition thereto. The deductible shall not apply to the Supplemental Coverages. Coverage does not apply to any retainers for work or expenses not incurred, fines or monetary awards of any kind, judgments or settlements. The liability of the Company for all payments made under the Supplemental Coverages described in this Section II shall not exceed the Supplemental Coverages Aggregate Limit.
A. DISCIPLINARY PROCEEDINGS: The Company shall reimburse the NAMED INSURED for reasonable fees, costs and expenses, paid to third parties (other than an INSURED), incurred in defending a DISCIPLINARY PROCEEDING first made against any INSURED during the POLICY PERIOD, and reported to the Company in writing during the POLICY PERIOD or within sixty (60) days thereafter.
B. REGULATORY INQUIRY: The Company shall reimburse the NAMED INSURED for reasonable fees, costs and expenses, paid to third parties (other than an INSURED), incurred in the defense of a civil, administrative or regulatory written request for information, investigation or proceeding against any INSURED by a federal, state or foreign governmental authority arising out of a PRIVACY EVENT or SECURITY FAILURE, first made against any INSURED during the POLICY PERIOD, and reported to the Company in writing during the POLICY PERIOD or within sixty (60) days thereafter.
Definitions:
H. “DISCIPLINARY PROCEEDING” MEANS any proceeding before a bar association, disciplinary board or similar entity or official to investigate charges alleging professional misconduct as a lawyer or other matters relating to attorney licensing and/or discipline. DISCIPLINARY PROCEEDING does not include any proceeding related to charges, investigations or actions filed with a regulatory agency or official, including without limitation, Securities Exchange Commission, the Internal Revenue Service, the U.S. Patent & Trademark Office or any similar agency.
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.
CLICK HERE TO GET AN ATTORNEY MALPRACTICE QUOTE
Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080