Shrinking limits defense provision

{
  "id": "MLC-T-INS-003080",
  "term": "Shrinking limits defense provision",
  "field": "Insurance and risk management",
  "definition": "A clause in a liability insurance policy that reduces the available policy limits by the amount of defense costs incurred. This means that legal expenses, such as attorney fees and court costs, are deducted from the total coverage amount, leaving less for actual indemnity payments to claimants. Such provisions are common in directors and officers (D&O) liability policies and professional liability coverage.",
  "url": "https://mlchart.com/terminology/insurance/shrinking-limits-defense-provision/"
}