Can my firm increase limits of liability on my Professional Liability policy?
The insurance company will need to look at all of the factors before determining if the limits of liability can be increased. Here are some options and the factors the insurance company looks at.
Do the limits make sense for your firm? The insurance company will look at what limits are being requested and determine if the limit requests are in line with your firm size. If the request for higher limits is due to a project the insurance company may ask for additional details on the project. The questions that may be asked are project type, services offered by your firm, billings associated with the project, and construction value of the project. With that the insurance company may also consider a project endorsement for the higher limits rather than increasing your firms overall limits. This will depend on the limits of liability requested and the project type.
If the insurance company is offering both an increased overall practice limit and a project endorsement limit consider the options. If the contract is not specifying if it needs to be a project endorsement the decision may come down to the premium difference for the increases. This will be a decision to discuss at your firm and with your insurance agent.
Another factor to keep in mind when it comes to limits of liability increase is that projects that were worked on prior to the increase will be at the lower limits of liability. Essentially there will be an effective date on the increased limits and the projects that are after the increased limits will be at the higher limit.
Insurance companies may limit the amount of increases in a policy year. Be sure to discuss what increases best fits your firms needs with your insurance agent and the insurance company. If you have questions regarding limits of liability, please call or email your Professional Underwriter.