There are commonly a few choices on professional liability policies with regards to limits and deductibles. It is important to understand the deductible and how it could affect your firm.
The deductible on professional liability will depend on a few factors. The insurance company may only have specific deductibles available, and your firm size will also play as a factor in the deductibles available. If your firm is small there may be very limited deductible amounts available, $0, $1,000 or $2,000, depending on the insurance company. If your firm is mid-sized to large there will be higher deductibles available. Mid-sized firms will not have small deductibles available, such as $1,000. The deductibles will be higher, such as $5,000 to $25,000. If your firm is large, the deductibles will likely be $25,000 or higher.
Additionally, there are deductible options on professional liability. There is first dollar and straight deductible. The first dollar deductible may also be referred to as the damages only deductible. This means your firm only pays the deductible if there is a settlement on a professional liability claim. If nothing ever develops with the claim there will not be a deductible to pay. With straight deductible also referred to as the damages and defense deductible, your firm pays the deductible as soon as a claim is opened.
Is it important to understand what your firm’s deductible is when binding your professional liability policy. It might be a slight premium change to increase the deductible, however at claim time the premium savings may not be worth the higher deductible your firm may be responsible for.
If your firm has any questions with regards to professional liability deductible and deductible options please call, or email, your Professional Underwriter agent for assistance.