Attorney Malpractice Fees/Punitive Damages Excluded? – LMIC
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 your state may not permit.
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 LMIC (Lawyers Mutual Insurance Company) policy the definition of damages excludes punitive damages:
1.6 “Damages” means:
a final monetary judgment, award or settlement but does not include:
(a) any fine, sanction, penalty, multiplied or punitive or exemplary damages;
(b) any amounts ordered as restitution, disgorgement or forfeiture of any sums;
(c) any reduction or set off of any fees or costs paid to or charged by any Insured, or any other offset; or
(d) prevailing party attorneys’ fees pursuant to contract.
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.
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Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as
L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
(616) 940-1101 Ext. 7080