What is a mediation credit on a Professional Liability policy? Some insurance carriers offer a reduction on the deductible if your Design Professional firm resolves a claim with the use of mediation. For example, if your firm’s deductible is $10,000 and a claim is settled through mediation the insurance carrier will reduce the deductible by 50%, your firm would be responsible for $5,000. Insurance carriers view mediation as a beneficial resolution for the parties involved. It not only shortens the process of a claim, it also cuts down on potential high expenses that can be involved in a claim. Here are some example mediation clauses:
If the Company and the Insured agree to resolve a claim through voluntary mediation and the claim is resolved through voluntary mediation, the Insured’s deductible obligation for such claim will be reduced by 50% subject to a maximum reduction of $25,000.
Great American Insurance
- Early Resolution Deductible Credit
If a Claim made during the Policy Period is resolved by agreement, with the consent of the Named Insured and the Company, as reflected in a signed settlement agreement, within one (1) year following the date the Claim is reported in writing to the Company, the Named Insured’s Deductible obligation for such Claim will be reduced by seventy-five percent (75%), subject to a maximum deduction of $25,000 per Policy Period for all such Claims resolved or concluded in accordance with this Section V. C.
- Mediation Deductible Credit
If the Company and the Named Insured agree to resolve a Claim through voluntary Mediation and the Claim is resolved, the Named Insured’s Deductible obligation for such Claim will be reduced by fifty percent (50%), subject to a maximum reduction of $25,000 per Policy Period for all such Claims resolved or concluded in accordance with this Section V. D.
Travelers Casualty & Surety Insurance
If the Company and the first Named Insured settle a Claim through voluntary mediation, the first Named Insured’s deductible obligation for such Claim will be reduced by 50% subject to a maximum reduction of $25,000. Deductible payments made prior to the application of the above credit will be reimbursed within 30 days of the resolution of the Claim. This reduction does not apply to any Claim resolved through voluntary or involuntary arbitration.
As always be sure to read your policy so you are aware of your mediation credit. Please feel free to reach out to your PUI Agent to help answer questions on your Professional Liability policy.