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 Corepointe policy are:
I. INSURING AGREEMENT
C. Settlement
The Company shall have the right to negotiate a settlement or compromise of a claim as it deems appropriate but shall not commit to settlement of a claim without the written consent of the Named Insured. If the Named Insured refuses to consent to a settlement or compromise recommended by the Company and acceptable to the claimant, then the Company’s Limits of Liability under this policy shall be reduced to the amount for which the claim could have been compromised or settled, plus all claim expenses incurred up to the time the Company makes its recommendation, plus fifty percent (50%) of the claim expenses incurred subsequent to the date of such refusal, which amount shall not exceed the remainder of the Limits of Liability specified in Section III. A.
If any claim covered under this policy is resolved through the use of formal mediation within six months from the date it is first reported to the Company or within 90 days after suit is filed, the Deductible amount the Named Insured is obligated to pay will be reduced by fifty percent (50%), or by $12,500, whichever is less.
The failure of the Named Insured to expressly consent to a settlement or compromise recommended by the Company shall be deemed to be refusal to consent to a settlement or compromise.
III. LIMITS OF LIABILITY AND DEDUCTIBLE
C. Deductible
The deductible amount stated in the Declarations is the total amount of the Insured’s liability for each and every claim and applies to the payment of damages and claim expenses. The deductible shall be paid by the Named Insured or, upon the Named Insured’s failure to pay, jointly and severally by all Insureds. The Limits of Liability set forth in the Declarations are in addition to and in excess of the deductible.
If a claim is based on or arises out of the rendering of eleemosynary (pro bono) legal services, no deductible will apply but only where at the time of retention, there was written approval by the appropriate committee or lawyer within the Named Insured that the matter would be handled without compensation.
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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