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 Westport 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 PAYMENTS
A. The Company shall reimburse the NAMED INSURED up to $50,000 per POLICY PERIOD, 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. This coverage applies only to such fees, costs and expenses. It does not apply to any retainers for work or expenses not incurred, fines or monetary awards of any kind, judgments or settlements relating to, or directly or indirectly resulting from the institution or disposition of DISCIPLINARY PROCEEDINGS. The deductible shall not apply to this Supplemental Payment A.
Definitions:
I. “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.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080