“Duty to Defend” is an important provision in many Professional liability and Malpractice Insurance policies. This gives the insured the peace of mind that an insurer cannot just choose not to defend without clearly stating why the policy does not provide coverage. The reason that a “Duty to Defend” policy is purchased makes sure an insured is not left high and dry when a claim is reported.
The ProAssurance LawyerCare Policy Defends it Duty to Defend in the Defense and Settlement policy section:
3.1. DUTY OF DEFENSE
The Company has the right to investigate and settle claims, and the Company will defend, subject to the Limit of Liability shown in Item 4 of the Declarations and as explained in Section 5, any suit or arbitration seeking damages against the Insured to which this policy applies. Once the Company has paid the Limit of Liability:
a) the Company will not be obligated to pay any further damages or expense; and
b) the Company will not be obligated to undertake or continue the defense or investigation of any claim or suit.
The duty to defend covered losses is not unlimited. Note that once the company has paid the policy limits obligations under the policy end. Insureds need to understand the types of clients and their practices obtaining proper policy liability limits. A limits loss can leave you high and dry once the coverage is exhausted. For example, a legal malpractice suit that goes to trial averages over $80,000 in just defense costs.
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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