Prepare yourself from Liability Claims

| July 09, 2019
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I just wanted to give you a heads up about your insurance and defending yourself from a liability claim. 

There is a HUGE difference between defense “inside” and “outside” the policy limits. Here’s what I mean:

Defense “inside the limit” means all defense costs are deducted first from the policy limit. This includes attorney’s fees, court costs, investigation and filing legal papers. All of these quickly reduce the overall limit of money the policy can pay for monetary damages awarded by a ruling.

Here is an example: 

Imagine you are the owner of John’s Placement Company, and you carry a $1 million EPLI (Employment Practices Liability Insurance) policy. One or more employees sue the company for sexual harassment, and the jury awards $900,000. Let’s also assume the legal defense costs are $1 million.

If you had defense inside the limits of liability coverage, your entire policy would be exhausted paying for the legal fees. You would be stuck paying $900,000 in damages out of pocket. 

What you actually want is “defense outside the limit of liability coverage.” It provides separate limits for legal defense costs and court-awarded damages. It pays defense costs separately, so the cost of defending your case does not diminish your policy limits. 

Many agents in the senior placement and referral industry lack adequate protection because they don’t understand the difference in these coverages.

If you are uncertain, we can help you determine which type you now have. Just call or email us at the address below.

Jeff Schmidt and the Eaton-Provident Group team
Phone: (480) 941-4895
Our policy covers defense outside the limits. Your defense costs get paid in addition to the liability limits of your policy. It’s better coverage for you. Give us a call and let’s talk about it!

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