How Do I Read My Quotes
A firm’s liability exposure should be reviewed each year. Are you carrying proper limits? Can I afford to change my deductible to save on the bottom line? What limit options do I have?
We suggest that you review your firm’s potential exposure yearly and if you wish to obtain a quote for higher limits or a change in deductible, please let us know and we will be glad to ask the carrier for the additional quotes.
Insurance language on the quotes may be confusing; what is first dollar defense or what do they mean by claims expense outside the limits etc.
The following is a list of two categories you may see on your firm quote which will have a bearing on your premium and exposure.
First Dollar Defense Deductible, Per Claim Deductible and an Annual Aggregate Deductible?
A First Dollar Defense Deductible means the firm’s deductible will apply only if there is an indemnity payment issued by the carrier. Defense costs will not trigger your deductible. A First Dollar Defense Deductible is A slightly higher PREMIUM COST than the other two deductible options listed below.
Per Claim Deductible means the firm will be responsible for their deductible once there is any payment issued by the carrier whether the payment pertains to incurred defense expenses or an indemnity payment.
Annual Aggregate Deductible is a method to max out the amount the firm will pay toward a deductible for a policy year. The annual aggregate is important if a firm is concerned with having more than one claim presented within any given policy year.
Claims Expense Inside the Limits vs Claims Expense Outside the Limits
All malpractice carriers offer the standard Claims Expense Inside the Limits option to a firm. However, some carriers will off a firm both options for Claims Expense Inside the Limits and Claims Expense Outside the Limit.
A policy with a Claims Expense Outside the Limits option is slightly more expensive in premium because it is providing you with added Defense limit protection.
Claims Expense Inside the Limits (CEIL) means that the limits of liability decrease with the costs of defense and/or indemnity payment.
Claims Expense Outside the Limits (CEOL) means the limits of liability decrease with an indemnity payment. Under a CEOL option, the limits of liability are not decreased when defense expenses are incurred unless the defense costs incurred exceed the added defense limit provided by the carrier.
Kaestner & Berry is here to assist you with knowing the difference and answering any questions you may have.