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Home > Blog > Attorney Malpractice Fees/Punitive Damages Excluded? – Westfield
FRIDAY, AUGUST 25, 2023

Attorney Malpractice Fees/Punitive Damages Excluded? – Westfield

Westfield Attorney Malpractice Specimen Policy

Attorney Fees are almost universally excluded in the attorney malpractice policy damages definition.  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 Westfield policy the definition of loss (damages) may include punitive damages:

III.        DEFINITIONS  

 

I.                    I.          Loss means any amount that an Insured becomes legally obligated to pay as a result of a Claim, including but not be limited to the following:

(1)               compensatory damages, settlements, and judgments, including pre-judgment and post-judgment interest;

(2)              punitive, exemplary, or multiplied damages, if and to the extent such damages are insurable under the law of the jurisdiction most favorable to the insurability of such damages, provided such jurisdiction has a substantial relationship to the relevant Insured, the Insurer, or the Claim giving rise to such damages; and

(3)              Defense Costs.

Loss (other than Defense Costs) does not include:

(a)           taxes, civil or criminal fines, sanctions, penalties (except as provided in Paragraph (2) above), or forfeitures, whether pursuant to law, statute, regulation, or court rule, including but not limited to awards under 18 U.S.C. §1961, et. seq., Federal Rules of Civil Procedure 11, or 28 U.S.C. §1927, and any similar state statutes, regulations, rules, or law, and injuries that are a consequence of any of the foregoing;

(b)           the cost to an Insured to comply with any injunctive, remedial, preventative, or other non-monetary or declaratory relief, including specific performance, or any agreement to provide such relief;

(c)           return, withdrawal, forgiveness, or reduction of any fees or receivables paid to or charged by an Insured, including any restitution, reduction, disgorgement, or return of any payment, charges, or fees, except to the extent such fees paid to or charge by the Insured are used as a measure of damages resulting from the performance of, or failure to perform, Professional Services;

(d)           the cost to an Insured to correct or re-perform services, including Professional Services;

(e)           liquidated damages pursuant to a contract, to the extent such amount exceeds the amount for which the Insured would have been liable in the absence of such contract; and

(f)            amounts uninsurable under the law pursuant to which this Policy is construed.

 

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

 
 
   Contact Me Today
   Lee Norcross, MBA, CPCU, CPIA
   California License # 0D87292
    L Squared Insurance Agency, LLC ® DBA in California as
   L2 L Squared Insurance Agency, License # 0L93416

    Managing Director, CEO
    Click here to contact Lee Norcross, MBA, CPCU, CPIA

     (616) 940-1101 Ext. 7080

 
Posted 6:20 PM

Tags: westfield attorney malpractice policy, attorney fees punitive damages
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