The reality of attorney malpractice insurance policies is paying the deductible when a claim in 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 Everest policy are:
SECTION V - DEFENSE, INVESTIGATION, & CONSENT TO SETTLE
E. Collaborative Defense
The Insured’s Deductible as provided in ITEM 4 of the Declarations will be reduced by fifty percent (50%) for any Claim if:
1) such Claim is settled or resolved as:
a) evidenced by a written settlement agreement; and
b) within 365 days of the date the Claim is reported to the Insurer pursuant to the terms and conditions of Section IV, and for an amount, acceptable to the Insurer; or
2) such Claim is settled as a result of arbitration or mediation;
provided, however, the amount of the Deductible reduction shall not exceed $25,000 for any such Claim.
SECTION VI – LIMIT OF LIABILITY & DEDUCTIBLE
The Deductible stated in ITEM 4 of the Declarations shall apply separately to each Claim. The Insurer shall be liable only for Loss incurred by the Insured in excess of such Deductible. Any payment of a Deductible in connection with a Claim shall not reduce any other applicable Deductible for any other Claim (that is not a Related Claim). A Deductible shall be satisfied by monetary payments of Loss by the Named Insured or upon the Named Insured’s failure to pay, jointly and severally by all Insureds. Any Deductible shall be paid within thirty (30) days of written demand by the Insurer. All other rights, duties, and obligations under the Policy shall remain the same regardless of whether or not the applicable Deductible has been satisfied.
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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.
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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