The reality of attorney malpractice insurance policies is paying the deductible when a claim is made against the law firm. For an additional premium Insurers may offer for 1st dollar defense which addresses claims expenses for claims with no indemnity payment made or an aggregate deductible for multiple claims brought in any one policy year. But insurers may also have features built into their policies that reduce your deductible obligation. Valuable policy features mean that there is more than policy premiums that should be compared prior to making an insurer coverage decision. As every law firm is unique, policy features important to one insured are not important to another insured.
Deductible reducing features with the AIG (National Union Fire) policy are:
III. Special Benefits
1. Claim Expenses.
a. The first two thousand five hundred dollars ($2,500) of claim expenses incurred by us for each claim shall not be subject to the deductible and shall erode the limits of liability.
4. Reduced Deductible for Arbitrated or Mediated Claims.
We have the right to submit a claim to binding arbitration or mediation; however, no claim shall be submitted to arbitration or mediation without your prior written consent. If you consent to submit a claim made against you to binding arbitration or mediation upon our request and agree with the terms and conditions we specify as respects such arbitration or mediation, we will reduce the deductible stated in the Declarations by fifty percent (50%). However, in the case of mediation, the maximum dollar amount by which the deductible will be reduced under this special benefit is two thousand five hundred dollars ($2,500).
VI. Limits of Liability & Deductible
4. Deductible.
The deductible stated in the Declarations is the total amount of your liability for each claim and applies to the payment of damages and claim expenses, except as otherwise permitted in the Special Benefits section of this policy. The limits of liability are in addition to and in excess of the deductible. The deductible shall be paid by the named insured, or upon the named insured’s failure to pay, jointly and severally by all of you.
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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