January 5, 2018. A Connecticut court held that public policy does not prohibit “defense only” malpractice policies granting the motion for summary judgement on behalf of Markel Corporation/Evanston Insurance Company. In making its decision, the Court adopted the argument of Carrier expert Ty Sagalow that custom and practice of the insurance industry favoring “defense only” policies in order to provide the market with less expensive alternatives in the high rate medical malpractice field supports public policy even in states, such as Connecticut, where there is a minimum $1,000,000 defense and indemnity insurance requirement for medical professionals.
The Court held therefore that the plaintiff assignee of the policyholder had no more rights than the policyholder “just as Dr. Allen would be unable to recover the damages sought by plaintiff, the plaintiff — who stands in the shoes of Dr. Allen — is unable to recover against the defendants … because Dr. Allen’s insurance policy does not include the type of recover sought by the plaintiff.”
Favorably quoting a West Virginia case on defense within the limit restrictions, the court stated “the defense within limits provision in medical malpractice insurer’s tail endorsement to insured’s policy did not violate public policy; strong public policy of West Virginia was to promote affordable accessible tail coverage that balanced the interests of both patients and physicians, and foreclosing carriers of tail insurance from including defense costs within the available liability limits… would have increased the cost of tail insurance in West Virginia and run afoul of the legislature’s stated goal of promoting stable and affordable tail insurance premiums.”