Allocation of Defense Costs
What this clause says
If a Claim includes both covered and uncovered matters or parties, the Insured and the Company shall use their best efforts to determine a fair and proper allocation of Damages and Claim Expenses between covered and uncovered amounts.
What this actually means
Allocation is how a defense bill gets split when a case includes some claims the policy covers and some it does not, or some defendants who are insureds and some who are not. Best-efforts language means the split is negotiated; other forms specify a method or default to the insurer determination.
What it means for an operator
Allocation shows up in nearly every serious senior care claim, because complaints plead negligence alongside intentional conduct, statutory abuse alongside ordinary care, and punitive damages alongside compensatory. It also arrives whenever an uninsured entity in your ownership chain is named, which is why the entity map matters so much. Two things improve your position. Ask for a defense costs allocation provision that allocates one hundred percent of defense to the covered matters where any covered claim is present, which is available in some markets. And take a position early, in writing, because the framing set in the first months of a claim tends to survive into the eventual negotiation.
Why the Policy Checker does not score this
This term is worth understanding and cannot be checked from a declarations page. There is no single field that would answer it, and scoring it from an assumption would produce a confident wrong finding, which is the one thing a tool like this must never do. It is defined here and left out of the check.
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Common questions about this clause
- What is the difference between neglect and negligence in a senior care claim?
- Does my excess policy follow form over abuse coverage?
- Who should be a named insured on a senior care liability policy?
- How long after a resident dies can the family still sue?
- Do defense costs count against the limit on a senior care liability policy?