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 Freedom Specialty Insurance policy’s malpractice coverage is ‘Duty to Defend’, the disciplinary coverage is ‘Reimbursement’. Policy wording for disciplinary coverage and reporting differs by carrier. The disciplinary reimbursement is not subject to the policy deductible.
Policy Coverage:
C. Coverage Extensions
1. Disciplinary Proceedings
Subject to a limit of $50,000, we will pay on your behalf defense costs you incur responding to a disciplinary proceeding first commenced against you and reported to us in writing during the policy period, or an extended reporting period, if applicable, as a result of a covered act committed by you on or after the retroactive date.
The limit of liability applicable to this section is the maximum amount payable for the policy period, regardless of the number of disciplinary proceedings first commenced during the policy period or the number of you subject to disciplinary proceedings and is in addition to the aggregate limit of liability as set forth in the Declarations. No deductible shall apply to this coverage extension.
Policy Definition:
L. Disciplinary proceeding means a proceeding before a state or local bar association, peer review committee or governmental regulatory 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