Let’s Talk E&O: What is First Dollar Defense?

First Dollar Defense is a valuable coverage option offered by TIAC to qualifying firms that modifies how a policy’s deductible is applied to claims expenses.  Claims expenses are the lawyer’s fees and related costs incurred in defense of a covered claim.  Under a standard policy, the deductible is applied to settlements, judgments, and the claims expenses.  When a policy has the First Dollar Defense endorsement, the deductible applies only to settlements and judgments, not to claims expenses.  It allows TIAC to begin payment for these expenses from the “first dollar” incurred.  If a covered claim is resolved with no settlement or indemnity payment, an insured would not pay any portion of the deductible.

First Dollar Defense is offered for a higher premium, but it does limit the payment of your deductible for unfounded and successfully defended claims.

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This information is provided for the purpose of illustration.  The coverage provided is that set forth in the terms, conditions, and limitations of the policy of insurance.