The professional liability claims process involves several key stages, from initial reporting to resolution. Your architecture/engineering firm must be proactive and cooperative, working closely with their insurer and assigned legal counsel.
Key Steps in the Claims Process
Immediate Assessment and Documentation: As soon as you become aware of a claim or potential claim, assess the situation. Document everything, including the date, time, location, and nature of the incident. Gather all relevant evidence, such as contracts, documentation, emails, photos, and witness information.
Prompt Reporting to Your Insurer: Contact your insurance company or broker immediately. Professional liability policies are “claims-made,” requiring the claim to be reported within the policy period. Provide a written notice with all available information and your policy number. Do not attempt to settle the claim on your own or admit fault, as this may violate your policy.
Insurer Acknowledgment and Assignment: The insurer will acknowledge receipt of the claim (typically within a few business days) and assign it to a claim professional experienced in your field.
Investigation and Policy Review: The assigned claim professional (and potentially an independent adjuster or expert) will investigate the allegations, review the gathered documentation, and determine what is covered under your policy. They may issue a “reservation of rights” letter if there are potential coverage questions.
Building the Defense Team: If necessary, the insurer will appoint qualified defense counsel to represent you. You should cooperate fully with this team, providing all requested documents and information.
Development of a Resolution Plan: The defense team will evaluate the strength of the case, often using experts, and develop a plan for resolution. This may involve:
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- Negotiation and Mediation: Most claims are settled out of court through negotiation or mediation, which is often quicker and less costly than litigation.
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- Litigation/Trial: If a settlement cannot be reached, the case may proceed to trial. The insurer and defense counsel will manage this process.
Settlement or Judgment and Payment: If the claim is settled or a judgment is made, the insurance company will arrange payment for covered losses, including defense costs and damages, up to your policy limits. Most policies require your written consent before settling a claim.
What You Can Do to Help
- Report all potential claims: When in doubt, report any circumstance that might lead to a claim. Most professional liability policies include pre-claims assistance.
- Cooperate fully: Be responsive and provide all requested information and documentation promptly.
- Maintain open communication: Expect regular updates from your defense team and provide input when necessary.
- Utilize risk management resources: Take advantage of any risk control resources your insurer provides to help prevent future claims.
Here is a link for some additional FAQ’s from AE Pronet. https://aepronet.org/resources/faqs/
If your firm has any questions about the claims process for a professional liability policy please call, or email, your Professional Underwriter agent for assistance.