First Dollar Deductible Option on Professional Liability for Architects/Engineers
The name first dollar may look different with different insurance companies; it may also referred to as damages only or dollar one defense. With the first dollar deductible option your firm does not pay a deductible unless there is a claim settlement. Here is how the language reads with different insurance companies.
Example 1:
The Deductible obligation stated in Item 4. of the Declarations will apply to Damages only and will not apply to Claim Expenses. The Deductible applies separately to each Claim whether this insurance is primary or excess.
Furthermore, the Deductible will apply as follows:
(i) The Deductible for each Claim is the most the Insured must pay as a Deductible for Damages arising out of any single Claim.
(ii) The aggregate Deductible, if any, is the most the Insured must pay as a Deductible for all Claim(s) first made and first reported during each Policy Year.”
Example 2:
The Insured’s obligation to pay up to the per claim Deductible amount shown on the Declarations and the aggregate Deductible per policy year shown on the Declarations, if any, including but not limited to claim expenses, shall apply to all Insuring Agreements and Supplemental Insuring Agreements under the Section of the Policy entitled COVERAGE; provided, however, such Deductibles do not apply to claim expenses.
Example 3:
Subject to Section V. C. or D., the Deductible amount shown in Item 5.A. in the Declarations as the “Each Claim” Deductible is the Insured’s obligation for each Claim and only applies to the payment of Damages. The Deductible will be paid by the Named Insured. The Limits of Liability set forth in the Declarations are in addition to, and, excess of, the Deductible.
The first dollar deductible is a richer benefit than the straight deductible and is not always available. It will depend on the insurance company, claims history and the size of your firm as to if an insurance company can offer the first dollar deductible.
If you have any questions about the first dollar deductible on your firms professional liability policy please call or email your Professional Underwriters agent for assistance.
