Deductible types in a Professional Liability policy for architects/engineers-
There are several deductible types on a Professional Liability policy in the market place. The most common deductible types are a straight deductible or a first dollar defense deductible, the deductible type does not mean the amount of your firm’s deductible.
With the first dollar defense deductible your firm will only pay a deductible if there is a claim settlement. If there is not a claim settlement then your firm is not required to pay the deductible. Here is an example of the language used in a Professional Liability policy.
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.
The straight deductible option, your firm will pay as soon as a claim is opened and expenses start with the claim. Here is an example of the language in a policy.
Deductible – Each Claim
Subject to Section II.C.ii. below, the deductible amount shown in Item 5.A. of the
Declarations is the Insured’s deductible obligation for each claim and applies to the payment of damages and claim expenses. 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.
If your firm has a $0 deductible the deductible type will not apply, your firm will pay $0 no matter what transpires with a claim. Additionally, the deductible may not apply in a pre-claim situation. There are also deductible mediation credits that may apply to a deductible, review your policy to determine what the credit is on your firm’s policy.
If your firm has any questions with regards the deductible type in your firms Professional Liability policy please call or email your Professional Underwriters agent for assistance.