We handle negligence cases against a wide variety of professionals - including physicians, attorneys, accountants, architects, and engineers. Although many of these professionals carry traditional liability or malpractice insurance policies, many professional liability policies contain what is called a declining policy limits provision.
What Is Declining Limits Coverage?
Declining limits (also called "wasting assets") policies contain a provision that reduces the amount of money available to pay claims by the amount of attorneys' fees and costs spent defending the claim through litigation. The practical result of this is the longer a claim drags on, the amount of money available to pay the claim becomes less and less. Similarly, the more vigorously the claim is pursued (and defended) the less money is likely to be available to pay the claim.
This might not matter if the defendant is a huge corporation that would have plenty of money to pay a large claim - even if the insurance policy limits were diminished. However, many professionals practice in very small partnerships or professional associations which can very easily be abandoned or bankrupted.
The Impact Of Declining Limits Coverage On Claims
Declining limits policies necessarily require some different strategic considerations. Sometimes it will make sense for the parties to meet very early in the life of a claim or case to see if a resolution can be achieved (thus preserving more insurance benefits for the plaintiff, and more protection for the defendant.) Other times, these cases just have to be worked-up like normal.
If you have any questions regarding a declining balance insurance policy, or a professional negligence claim, please call Winter Park attorneys Kim Cullen and Robert Hemphill at 407-254-4901 or text them at 407-644-4444.