What is the benefit of DOL (Defense Outside of Limit) coverage?
Most professional liability policies include the costs of defense within the Limit of Liability. Plaintiffs attorneys, the attorneys that bring suit against our insureds, are aware of this fact and will often threaten to drag out the claim as a way of promoting a quick settlement offer from the insurer. If the insurer spends a significant amount of the Limit on defense costs, there is a greater possibility that the remaining limit will not be enough to pay a court judgment. The insurer must inform the insured of this possibility, which leaves the insureds assets at risk for any judgment in excess of the insurance policy. Once the insured is aware of this possibility, most feel pressured to settle the claim quickly rather than risk losses beyond the insurance protection. If the insurer does not agree with the insureds request for settlement and an ultimate decision causes financial damage to the insured, the insured has a bad faith action against the insurance company. (In other words,
