Common exclusions in a professional liability policy

Common exclusions in a professional liability policy for architects/engineers-

Here are some of the more common exclusions amongst different insurance companies regarding a professional liability policy.

Insured vs insured.

Basically, what this is saying is you cannot sue yourself.  As an insured you cannot sue another insured that is on the policy.

Contractual liability

Insurance companies will not cover contractual liability under a professional liability policy.  It is common for contractors to have this requirement but for design professionals it is not covered under a professional liability policy.

Faulty workmanship

Professional liability insurance companies will not pay for faulty workmanship.  The policy is designed to cover errors and omissions of design, not for construction flaws.

Design or Manufacture of sold or supplied goods or products.

For example, if your firm is designing a product, the insurance company will not cover a claim for a product.

Warranties and Guarantees

While this may be common to see in contracts for general contractors, this is not covered under a professional liability policy for design professionals.

Criminal or malicious acts

The professional liability policy will not cover an unlawful act by anyone at your firm.  Any criminal acts will be declined by the insurance company for a claim.

Owned entity

If your firm provides design services to another entity that is owned or partially owned by the same entity, these types of claims will not be covered.  Typically, the ownership percentage for this exclusion is 49%.

There may also be exclusions for specific project types or for claims that have been previously reported to an insurance company.  Read your firm’s policies to know what all the exclusions are for your firm.  If you have any questions about exclusions on a professional liability policy please call, or email, your Professional Underwriter agent for assistance.common exclusions

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