The Professional Liability Insurance Program offers claim expenses both inside the limits of liability (known as CEIL) as well as claim expenses outside the limits (known as CEOL). When a valid claim is made, certain costs, referred to as claim expenses, begin to accrue. Claim expenses include attorneys' fees, court costs, and all other charges incurred by the insurer in defending a claim.
If your professional liability policy has CEIL, all claim expenses are deducted first from the liability limit and the balance is available for settling a judgment. For example, if you have a $1 million liability limit and your claim expenses total $400,000, there is $600,000 available to pay damages.
You can elect to have a CEOL endorsement on your policy.* For a small additional fee, you are provided with a separate but equal limit of liability for claim expenses. Using the same example as above, on a $1 million liability limit, the full $1 million is available for payment of damages, and there is an additional $1 million available for expenses related to the claim. Purchasing the CEOL option when you arrange for your insurance results in additional protection if a claim is filed against you.
* Certain states require mandatory CEOL coverage.