all incidents that could be potential claims.
Do not be overly afraid of being denied
coverage because of disclosure of a problem.
It is better to inform the carrier right
away. The carriers that you have had a past
relationship with, even when choosing not to
carry you any longer, will usually help find a
carrier willing to take a little more risk with
higher deductibles and lower limits, but you
will have coverage.
The application normally provides that
if an applicant elects to defend a claim
without involving the carrier there will be no
coverage afforded under the policy. It is not
uncommon for attorneys to determine that
the claim is so small that they choose not to
report the event to the carrier. I advise at all
times to report.
Disciplinary Complaints
The next important area of the application
generally is whether any member of the
firm has had a disciplinary complaint in the
past year and whether the carrier has been
informed as to the status of that disciplinary
complaint. Implicit in that question is
the implication of reporting disciplinary
complaints to your carrier regardless of
whether you have purchased disciplinary
coverage. So, there is a duty separate and
apart from an incident/claim duty to disclose
fully disciplinary complaints.
Duty to Supplement/Affirmation
The application will further provide that the
information contained is to be supplemented
at any time when the firm becomes aware
of facts regarding a potential claim. The
application will announce this is a continuing
obligation.
Final Thoughts
My goal has not been to exhaustively
go through the application, but instead,
to comment only on the most relevant
questions and describe generally the law
regarding the application.
THE POLICY
A North Dakota professional liability policy
will be interpreted like any other insurance
contract. Continental Cas. Co. v. Kinsey
NB