pre-claim advice credit
A provision found in professional liability policy forms affording a reduced
deductible (or retention) if, prior to the time a claim is made, the insured
reports the "incident" giving rise to the claim to the insurer. The purpose
of the provision is to encourage insureds to make such reports, which allow
the insurer to provide advice, generally from an attorney selected by the insurer,
on how to handle the situation. For example, prior to terminating an employee,
if an insured contacts the insurer's employment counsel, the insured will receive
instructions on how to reduce the possibility of being sued for wrongful termination
(e.g., advice regarding how to conduct the exit interview, how much severance
to pay, what to say to the ex-employee regarding the providing of references).
Links for IRMI Online Subscribers Only:
PLI XI.V