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Coverage Question Series – Part 27
Post on November 2nd, 2018
This is a continuing series in which we address policy coverage questions that we routinely discuss with you and your colleagues. The answers provided are based on the basic policy form, currently LPLP-1s (effective for all policies new or renewed as of May 1, 2018). Refer to your specific policy and any endorsements attached thereto that may change coverage or the answers provided here.

I need to report the fifth claim for this policy year, am I covered? 

Yes, subject to the same policy terms as your first claim. Each policy is issued with a per claim policy limit and an aggregate claim limit. Without getting too far into the weeds, so long as your policy has an aggregate claim limit remaining, your policy will respond to the fifth claim made.


How about an example! Your firm purchased a full-time policy with $100,000 / $300,000 limits (also referred to as $100/$300). $100,000 is the per claim policy limit and $300,000 is the aggregate policy limit.

  • For made and reported claims one and two, defense counsel expertly obtained a defense verdict and dismissal in your favor. Because you have “outside” defense costs and your policy is rated for full-time, your limit of liability is not reduced by the cost of defending you.
  • When you realized you missed the statute of limitations in filing that PI case for claim three, however, it was agreed to settle for your per claim policy limit of $100,000.
  • When the FDCPA claim was made and reported as claim four, it was settled before trial for $15,000.
  • Therefore, there would be the full per claim policy limit of $100,000 available when you report the fifth claim made during the same policy period as the prior four. OBLIC has paid $115,000 in losses on the prior claims, leaving a remaining aggregate claim limit is $185,000.

The per claim policy limit never increases but can decrease if the remaining aggregate policy limit is less than the per claim policy limit. Hopefully, you never have reason to report a single claim, much less five! But be aware, these policies are not unlimited refills when it comes to claims.

As you should expect, these Q&A scenarios are based on simple hypotheticals. Coverage determinations for an actual claim are ultimately based on the unique facts, applicable law, and the Terms, Conditions, Limitations, Exclusions, and Endorsements of your policy.
Please contact me at [email protected] if you have any questions!
Carl Marsh, Esq.
Claims Counsel