pre-claim advice credit

The pre-claim advice credit is 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.

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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).