Insurance PolicyWho wouldn’t want a legal malpractice insurance policy that wiped out the deductible?  To make doubly sure that you never have to pay a deductible, why not have an policy that has a zero dollar deductible and 1st dollar defense. 

This is why you cannot have both.

1st dollar defense (FDD) is also called a loss only deducible.  Whichever name is used they mean the same thing.  Certain malpractice insurers will offer FDD.   With FDD the insured is only responsible for the deductible if there is an indemnity payment required on the claim.  Without FDD the deductible is due as claims expenses or indemnity payments are incurred.   If the claim that is made results in no indemnity payment then there will not be a deductible owed for that claim.  The other advantage of having FDD is that with many Attorney Malpractice Insurance claims the time between when a claim is made and an indemnity payment is due could be could be many months if not years.  For certain practice areas such as family law that have a higher frequency of claim the additional cost of FDD makes sense.

Some malpractice Insurers also a zero dollar deductible option on their attorney malpractice insurance policies.  With a zero dollar deductible there is no deductible payment even if there is an indemnity payment.  An FDD endorsement services no purpose as an FDD endorsement also eliminates the deductible payment until there is an indemnity payment.  But with a zero dollar deductible there is no deductible to pay.   A zero dollar deductible is the ultimate 1st dollar defense option to wipe out the deductible.

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