ICS
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GRIEVANCE DEFENSE
Supplementary payment that provides for defense of complaint made against an attorney and filed with body that regulates attorney licensing.


INSURED
Provision of insuring agreement that explains who is covered under a policy.

LIMITS OF LIABILITY
Maximum the insurance carrier will pay “per claim” and “in the aggregate” for the policy period.

POLICY/PRIOR ACTS
Lawyer’s malpractice policies are claims made policies. The policy will cover claims made during the policy period, provided that the legal service was provided on or after the “prior acts date/retroactive date”. The prior acts date/retroactive date is generally the inception date of the policy, unless coverage is allowed to lapse.


PREMIUM
Amount paid per year for the coverage outlined. All premiums quoted include applicable taxes and fees, if any.


PROFESSIONAL SERVICES
Provision of insuring agreement that explains what legal services are covered under a policy.

COMMON MALPRACTICE INSURANCE TERMS

AM BEST RATING
AM Best, designated as a Nationally Recognized Statistical Rating Organization (NRSRO) by the US Securities and Exchange Commission, is an independent rating agency that rates the financial stability of insurance companies.


CLAIMS EXPENSES
Claim expenses (Defense Expenses, including legal fees) can be paid from, and therefore reduce, the limits of liability available to pay a claim (Claims Expenses Inside) or can be paid from a separate limits available for claims expense, thereby preserving the full limits of liability to pay a claim (Claims Expenses Outside Limits).

CONSENT TO SETTLE
Provision of insuring agreement that determines who controls settlement of a claim – insured or insurer.

DEDUCTIBLE
Amount of the claim not covered by the insurance carrier but retained by the insured.  Also known as retention.

EXCLUSIONS
Provision of insuring agreement that determines what would be excluded from coverage under a policy.


EXTENDED REPORTING PERIOD (ERP) 
Period of time after a claims made policy has expired during which a claim may be made and coverage triggered as if the claim had been made during the policy period.  Also referred to as tail coverage.


EARNING’S REIMBURSEMENT
Supplementary payment under policy that provides some limited compensation to attorney who must be out of the office due to a claim.

FIRST DOLLAR DEFENSE
Policy enhancement that defers the payment of the deductible until there is a settlement of award, while carrier pays for defense expenses. If the matter can be disposed of without a settlement or an award, then the firm never pays the deductible.

TERRITORY
Specifies the geographic region in which a service must be provided or an action brought to be covered under policy.