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 Hanover policy are:
C. LIMIT OF LIABILITY AND DEDUCTIBLE
2. Deductible
You will pay the deductible amounts shown on the Declarations page. The deductibles apply as applicable to each Claim or Supplemental Coverage Matter. You must pay the deductible immediately when invoiced or, in the event that offers of judgment or settlement demands are made which You and We agree should be accepted, prior to the expiration of the time period for responding to such offers or demands.
If different parts of a Claim or Supplemental Coverage Matter are subject to different deductibles, the applicable deductible will be applied separately to each part of such Claim or Supplemental Coverage Matter but the sum of such deductibles shall not exceed the largest applicable deductible.
3. Deductible Reduction Benefit
a. Mediation
If We ask, and You agree, to use Mediation to resolve any Claim brought against You, and if the Claim is resolved by Mediation within one hundred eighty (180) days after You receive the suit or demand, Your deductible obligation for that Claim will be reduced by 50%. The maximum amount of the reduction is $10,000.
b. Deductible reductions may not be combined. Only one reduction in Your deductible obligation may be applied to a single Claim. A deductible reduction will not be applied:
1) To any subsequent Claims in the Policy Period; or
2) If the Policy is cancelled, terminated, or non-renewed.
4. Aggregate Deductible
The Aggregate Deductible amount will be shown in the Declarations page, if applicable, and is the most You will pay for the sum of all Deductibles for all Claims to which this Policy applies.
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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