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Frenkel & Co., Inc. Company
Question: Does an E&O / D&O policy cover defense costs?
Answer: Yes, subject to the retention (deductible), an
E&O / D&O policy will cover the cost of defense for a covered claim.
Depending on the carrier and policy form, the policy may also cover the cost
of legal representation in the event of an investigation by a regulator.
Note that the policy limit includes all defense costs, charges and expenses. So if you have a policy with a $1,000,000 limit and it costs $300,000 to defend a claim, then only $700,000 will be available to pay any judgment or settlement.
