Interpreting professional liability policy loss runs for architects/engineers –
Loss runs or a claims history report, shows how many claims, circumstances and pre-claims your firm has filed under the professional liability policy. Here are some items to review when you do get the loss runs.
The general information the loss runs will include are your firms name, the policy number(s), effective dates and the date the report was generated.
In the details of each policy period the loss runs will include the date reported, the claim number, a brief claim description, close date of the claim, claim status, reserve indemnity, paid indemnity, paid expenses and the total incurred. The loss runs details will vary with each company.
The date reported is important because this is a claims made policy. The date the claim is made is the policy period and company that will respond on the claim. Most insurance company also have a ‘look back’ period of five years and this time period is from the time the claim was reported.
The claim number is a good to know with each company, this is the way to reference the claim. They insurance company may also include the claimant’s name for reference.
The claim close date is the date and claim status are also good to be aware of. This will tell your firm when the claims representative has closed the claim or if the claim is still pending.
The reserve indemnity is the amount that the insurance company estimates the claim may develop into. This is not a hard number just an indication, based on the insurance companies experience, the claim amount may be.
Paid indemnity and paid expense are the actual amounts that the claim has incurred. There may also be a separate line item to show the total of these to amounts as the total incurred.
If you have any questions about loss runs on a professional liability policy, please call or email your Professional Underwriters agent for assistance.