Claim Denied – Why?
Reasons a Claim Can Be Denied on a Professional Liability Policy for Architects and Engineers
While this is not something that happens very often it can happen and its best to understand the reasons why a claim could be denied.
Retroactive date – the work on the project was done prior to your retroactive date on the policy. If the project was worked on or completed prior to the retroactive date on your policy the claim can be denied.
Not reporting a claim – If your firm received a claim and did not report it to the insurance company within the required time period this can be grounds for denial. The claim should be reported to the insurance company as soon as it is received.
There is not a policy in place – The Professional Liability policy is a ‘claims-made’ policy. This means that the policy that is in place at the time of the claim will be the policy that will respond. If there is not a policy in place at the time the claim is made then there isn’t a policy to respond to the claim. This is also the case if your firm does not obtain an Extended Reporting Period and then a claim is reported there is not a ‘tail’ policy in place to respond to the claim.
Professional Liability application – if your application does not have accurate information or important information is left out this can be reason for denial of a claim. It is important that the insurance company have a full understanding of your firm before they are able to determine if they can provide a quote. If your firm has not provided truthful information the insurance does not have an accurate picture of your firm and therefore could be grounds for denial of a claim.
Not a Professional Liability claim – there are occasions when a claim may seem like a design error or omission but is in fact considered a general liability claim. In this case, the Professional Liability insurance company may deny the claim. Additionally, Workers Compensation claims are not covered under a Professional Liability policy.
Keep in mind, insurance companies are not generally out to deny claims, in fact, this is not very common. But it is important that your firm understands some of the reasons that a claim would be denied. Please call or email your PUI Agent with questions.