Step-Down Provision

A policy clause that reduces the available coverage limits under certain conditions, such as when a claim involves a specific type of excluded activity, an insured practicing outside their declared specialty, or when an additional insured triggers coverage. In law firm malpractice policies, step-down provisions may reduce limits when claims arise from practice areas not disclosed on the application or from moonlighting activities by individual attorneys. The provision means the firm technically has coverage but at a lower limit than the full per-claim or aggregate limit shown on the declarations page. Firms should review step-down language carefully to understand when reduced limits might apply.