Claim
Key Takeaway
A demand for money or services arising from an alleged wrongful act. In malpractice insurance, a claim is typically defined to include a lawsuit, arbitration demand, or written demand for monetary damages.
Definition
A demand for money or services arising from an alleged wrongful act. In malpractice insurance, a claim is typically defined to include a lawsuit, arbitration demand, or written demand for monetary damages. Some policies also include regulatory proceedings and subpoenas as claims. The exact definition of what constitutes a claim varies between carriers.
Why This Matters for Law Firms
How claims are handled directly impacts your firm financially and reputationally. Understanding the claims process and related terminology helps law firm leadership make informed decisions when a claim or potential claim arises, and ensures you do not inadvertently jeopardize your coverage by failing to comply with policy requirements.
Example Usage in Context
When a partner receives a demand letter from a former client, the firm's risk manager might reference this: "We need to understand the claim requirements under our policy before taking any action. Let me contact our carrier and broker immediately."
Related terms
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