Attorney Fees are almost universally excluded from the definition of damages in attorney malpractice policies. Punitive damages may or may not be excluded from malpractice coverage, but still may not be permitted by your state.
Your insurer may pay defense costs and the award for damages in a covered malpractice claim. Fees and sanction awards are another matter. Fees or sanction awards often exceed the value of the underlying claim. Awarded punitive damages could dwarf the underlying case.
The time to check for coverage is not after the punitive damage award. So how can you determine whether a particular malpractice insurance policy covers punitive damages? Punitive damage awards are normally awarded for egregious acts some malpractice policies provide coverage other policies exclude the coverage. In the Hanover policy the definition of damages excludes punitive damages:
D. DEFINITIONS
Damages mean:
1. Compensatory monetary judgments, awards or settlements, unless otherwise excluded;
2. Pre-judgment interest; and
3. Post judgment interest that accrues after entry of judgment and before We have paid, offered to pay or deposited in court, that part of the judgment within the applicable Limit of Liability.
Damages do not include:
4. Any costs or expenses in complying with any demand for or award of Equitable Relief, even if such compliance is compelled as a result of a judgment, award or settlement;
5. Any return, restitution or reduction of professional fees;
6. Correcting, re-performing or completing any Professional Services;
7. Criminal or civil fines, statutory penalties, or sanctions against You, whether imposed by law or otherwise; or
8. Punitive or exemplary damages, and the multiple portions of any multiplied damages awarded.
Click here for Punitive/Compensatory Damages Allowed by State
CLICK HERE TO OBTAIN AN ATTORNEY MALPRACTICE QUOTE
This blog is an excerpt from the policy. The complete policy along with applicable endorsements could impact the information provided above.
Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080