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 Travelers 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.
Declarations Page:
ITEM 6 ADDITIONAL BENEFITS LIMITS:
Disciplinary or
Regulatory Proceeding
Expenses Limits:
$25,000 for each Disciplinary or Regulatory Proceeding
$50,000 for all Disciplinary or Regulatory Proceedings
Policy Coverage:
III. ADDITIONAL BENEFITS
B. Disciplinary or Regulatory Proceeding Expenses that result from a Disciplinary or Regulatory Proceeding first initiated and reported to the Company during the Policy Period.
Definitions:
G. Disciplinary or Regulatory Proceeding means any formal administrative or regulatory proceeding by a disciplinary or regulatory official, board or agency, commenced by filing of a notice of charges, formal investigative order, service of summons or similar document, to investigate charges of professional misconduct in the performance of Professional Services.
H. Disciplinary or Regulatory Proceeding Expenses means reasonable and necessary fees, costs and expenses incurred by any Insured to investigate, defend, or appeal any Disciplinary or Regulatory Proceeding.
Disciplinary or Regulatory Proceeding Expenses do not include:
1. fines, penalties or sanctions assessed against any Insured; or
2. expenses, salaries, wages, benefits, or overhead of, or paid to, any Insured.
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