WHICH COVERAGE OPTIONS ARE BEST FOR YOUR CLIENT?

When purchasing insurance, it is important your clients understand each option presented, and know the meaning of each insurance term.

Claims Made Policy: Provides insurance for covered claims made and reported during the policy period or any extended reporting period, subject to policy or individual retroactive dates.

Retroactive Date: The date after which an act, error or omission must occur for coverage to exist.

DEFENSE COSTS

Inside: Any Defense costs incurred reduce the available limit of liability.

Outside: Defense costs are paid in addition to the liability limits. The amount in addition varies in different states and with different carriers.

50% Offset: Defense costs equal to 50% of the per claim limit of liability are provided in addition to the policy limit. If Defense Costs exceed the 50%, they may then reduce the Per Claim Liability Limit by up to 50%. Any defense costs incurred beyond the second 50% are then paid in addition to the liability limits.

DEDUCTIBLES:

Loss and Defense Per Claim Deductible:
The deductible applies to losses and/or expenses incurred, and applies to each claim made and reported during the policy period or any extended reporting period.

Loss and Defense Annual Aggregate Deductible:
The deductible applies to losses and/or expenses incurred, and applies to each claim made and reported during the policy period or any extended reporting period, with a maximum deductible amount per policy period.

Loss Only Per Claim Deductible:
The deductible applies only to losses/damages for each claim made and reported during the policy period or any extended reporting period. The deductible does not apply to claim expenses.

Loss Only Annual Aggregate Deductible:
The deductible applies only to losses/damages for each claim made and reported during the policy period or any extended reporting period, with a maximum deductible amount per policy period. The deductible does not apply to claim expenses.