Additional insured requests of Design Firms on Professional Liability
This is a frequent request of clients and other design firms to be added as additional insured on a Professional Liability policy. There are several reasons this cannot be accommodated on the Professional Liability policy.
Clients believe they will be better protected from third-party claims by being an additional insured on an architects or engineers Professional Liability policy. This may be an option for some types of insurance, General Liability for example, but not on Professional Liability. The reason is that the client is not providing design services and does not have the risk that the policy is designed to cover.
Secondly, the client cannot be an additional insured on the Professional Liability policy because the policy does not make payments to the named insured; the policy makes payments on behalf of the named insured for negligence. If the client were to have a claim against the design firm on the Professional Liability policy, settlements are paid to that client for the design negligence on behalf of the design firm from the Professional Liability policy.
Other design firms or contractors also occasional request to be an additional insured on Professional Liability policy. This cannot be accomplished on the Professional Liability policy because the other design firm and contractors do not have the risk and are not providing the services that the named insured design firm does. Again, the policy is intended to pay on behalf of the named insured.
General Liability and umbrella/excess policies commonly have the additional insured language that is requested of clients and other design firms. However, the Professional Liability policy is not able to have an additional insured of the client or other design firms on the policy. Please call or email your PUI Agent to assist with the policy or to answer any questions.