Liability Insurance Designed Specifically for Social Workers

Paid Losses

These are monies that are paid by the insurance company when incidents that are eligible to become covered claims under the insurance policy, resulting in claims adjudication and subsequent payment. Paid losses include allocated loss adjustment expenses (ALAE). These are largely legal defense fees and associated expenses arising from the covered claim.

Indemnity payments made on behalf of the insured by the insurer are also a loss, but not part of ALAE. Legally speaking, a loss is an injury sustained by the insured, or an injury or damage that the insured is liable for as a consequence of the happening of one or more of the accidents or misfortunes against the insurer, as consideration of the premium, wherein the insurer has undertaken to indemnify the insured under the insurance contract.

An actual loss of insurance is referred to as the total costs directly or indirectly resulting from a claim, and comprise the total payout that the insurance company will pay pursuant to the insurance policy contract. However, the total payout is limited by the defined amounts of limits as defined in the policy called sub-limits and the aggregate limits.

The total payout varies by the allowed frequency of defined claims incidents during the policy term, and the severity of the claims. In no case shall the insurance policy pay a loss that exceeds the aggregate limit as stated in the insurance policy contract. Endorsements are available to expand coverage under the insurance policy contract in exchange for an additional premium. These may include additional perils, added insureds, and loss coverage amounts or expanded limits and sub-limits. Generally speaking, the more comprehensive the insurance policy contract is, the higher the premium will be.

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