Per-Claim Limit
Key Takeaway
The maximum amount the insurer will pay for any single covered claim, including both defense costs and indemnity payments when defense is within limits. This limit applies individually to each claim and is separate from the aggregate limit.
Definition
The maximum amount the insurer will pay for any single covered claim, including both defense costs and indemnity payments when defense is within limits. This limit applies individually to each claim and is separate from the aggregate limit. Selecting appropriate per-claim limits requires evaluating the potential severity of claims in your practice areas.
Why This Matters for Law Firms
This term defines the boundaries of what your insurance will and will not pay for. Law firms that misunderstand coverage terms risk discovering gaps in protection only after a claim has been filed, when it is too late to remedy the situation. Reviewing these terms with your broker before binding coverage is a critical risk management step.
Example Usage in Context
During a coverage review meeting, the firm administrator might note: "Our policy includes a per-claim limit provision -- let's make sure we understand exactly what that means for our specific practice areas before we sign off on the renewal."
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