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 Attorney Protective (National Liability & Fire) policy are:
C. DEFENSE, SETTLEMENT AND SUPPLEMENTARY PAYMENTS
4. Collaborative Defense
Your deductible as provided in the Declarations of this Policy will be reduced by fifty percent (50%) for the relevant claim if we mutually collaborate with you to successfully resolve the claim and, as a result of such collaboration, any of the following occurs:
a. The claim is settled or resolved by us at mediation before suit is filed at terms and conditions, and for an amount, acceptable to us;
b. The claim is settled or resolved at mediation within 365 days after suit is filed at terms and conditions, and for an amount, acceptable to us;
c. The claim is settled or resolved as evidenced by a written settlement agreement and within 365 days of the date the claim is reported to us at terms and conditions, and for an amount, acceptable to us; or,
d. The claim is settled or resolved by us within your deductible as provided in the Declarations of this Policy, including all payments for damages and claim expenses.
However, the amount of the deductible reduction will not exceed $25,000 for the relevant claim.
D. LIMITS OF LIABILITY AND DEDUCTIBLE
4. Deductible
You are obligated to pay all claim expenses and damages up to the amount of the deductible shown in the Declarations for each and every claim. However, the first $25,000 of claim expenses shall not be subject to the deductible and will be paid directly by us. The deductible shall be payable by you, as claim expenses in excess of $25,000 are incurred or as damages are paid. The amount of the deductible is within and reduces both the Per Claim and Aggregate Limits of Liability. Payment of the deductible shall be made by you within thirty (30) days of our demand for payment.
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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, CPIA
Managing Director, CEO
(616) 940-1101 Ext. 7080