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Malpractice Insurance—Coverage for Sanctions

There is no coverage for sanctions or fines under a Professional Liability Insurance policy.  In most cases sanctions or fines would not be insurable anyway.   Sanctions and/or fines are meant to punish the individual and insurance policies are not meant to cover or make “whole” an individual that has committed these acts.

The Axis Lawyers Professional Liability Insurance policy excludes the sanctions or fines in the definition of damages:

"Damages means a monetary judgment or settlement. Damages does not include:

a.       fines or statutory penalties,  sanctions whether imposed  by  law or otherwise, or any  amount awarded or assessed against you in any claim;"


Again with all malpractice insurance, the wording and policy structure is not standard.  While the definition section of the policy is the most common place to find this exclusion, it is not the only place.

While there is no coverage for the sanction or fine, if there is a malpractice claim associated with the act that generated the sanction or fine, there may be at least defense costs for the malpractice claim if not coverage for an indemnity payment.   But whether there is coverage under the malpractice insurance policy for the malpractice claim will depend on the individual circumstances.

Note:  The above is general information about a Claims Made Insurance policy concept.  Different insurance policies and different situations may or may not treat these concepts in a similar manner.

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