Policy Structure
Defense Costs Inside Limits
A policy structure where defense costs, including attorney fees, expert witness fees, and court costs, erode the policy's per-claim and aggregate limits. As defense spending increases, less coverage remains available for settlements or judgments. This structure is standard in most legal malpractice policies and is sometimes called an eroding limits or burning limits policy.
Related terms
Defense Costs Outside LimitsA policy structure where defense costs are paid in addition to the policy's stated limits, preservin...Aggregate LimitThe maximum total amount an insurance policy will pay for all covered claims during a single policy ...Per-Claim LimitThe maximum amount an insurance policy will pay for any single claim, including defense costs if the...