Claims Expenses Inside the Limit (C.E.I.L.) VS. Claims Expenses Outside the Limit (C.E.O.L.)
Most of our policies will include either claims expenses inside the limit (CEIL) or claims expenses outside the limit (CEOL).
Claims expenses inside the limit is commonly referred to as an eroding policy or a Pac Man Policy. Under this provision any money spent to defend the claim will reduce the amount available to pay the claim. Conversely, with claims expenses outside the limits; CEOL, the policy will have a separate limit, often up to the full limit of the policy, available to pay defense costs without reducing the amount available to pay the claim.
For example, with a million-dollar limit under a CEIL policy, and 100,000 is spent on defense, there will only be 900,000 to pay the claim. If a million-dollar limit is set under a CEOL policy, and the defense costs 100,000, there will still be one million left to pay the claim.