You may have received a quote for your E&O insurance policy with options for “CEIL” and “CEOL” and wondered what are these coverage options and how do they differ?
“CEIL”, or Claims Expenses Inside the Limit of Liability is the standard coverage on a TIAC policy. What it means is that in the event of a covered claim, the claims expenses are deducted from, or erode the limit of liability. If a policy has a limit of liability of $500,000, and during the defense of a covered claim the expenses total $100,000, the amount that would be available to pay any judgment or settlement would be reduced to $400,000.
“CEOL”, or Claims Expenses Outside the Limit of Liability, is an optional coverage offered by TIAC to qualifying firms that allows for payment of those defense costs without diminishing the limits of liability. In the same claim scenario, the full $500,000 limit of liability would be available for the payment of settlement or judgment despite the payment of defense costs. CEOL reduces the exposure for an insured, but does come at the cost of additional premium.
For more information, contact your TIAC representative.
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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.