For the past 30 years, the Klein Agency has been successful in providing defense costs outside the limits of liability for most of our civil/surveying clients. Below is an real life example of how this coverage protected one of our clients from having to pay in excess of $200,000 after an insured claim.
A Surveyor/Civil Engineering Client (with policy limits of $1,000,000 each claim / $1,000,000 aggregate; $10,000 deductible) was named in a suit, with an insurance carrier that had defense outside the limits of liability. The plaintiff originally sued the Client for damages in excess of $1,000,000. This was a messy case and was aggressively defended for 3 years at which point the Client was forced to settle and pay damages of $825,000. The insurance carrier made this $825,000 payment on the Client’s behalf. Total defense costs and legal bills in this case were $438,223 (before applying the $10,000 deductible which the Client paid).
Since defense costs are outside the limits of liability with the insurance carrier, Client was only responsible for the $10,000 deductible; and the available aggregate limit of liability for the remainder of the policy year was $175,000. With other insurance carriers, the same Client would have suffered a total loss (exclusive of its insurance carrier) of $263,223. The indemnity payment ($825,000) plus legal fees ($438,223) exceeded the $1,000,000 coverage limits and the carrier’s obligation ceases when total payments reach policy limits. Client would be forced to pay the final $263,223 of the settlement payment and all coverage limits would be exhausted for the remainder of the policy term.
As an industry leader for insuring design firms, the Klein Agency continues to differentiate ourselves with the products we offer our clients.