Common Myths of Professional Liability Policies for Architects/Engineers

A Professional Liability policy or errors and omissions policies have some nuances to be aware of. Here are some common issues with the policy and the answers to those issues:

Even if my firm doesn’t have a policy in place after my firm closes down we won’t be sued. This is false, your firm or you personally can be sued even if you don’t have a policy in place. The Professional Liability extended reporting period or tail policy will protect your firm in the event that you are sued after your firm has closed down.

My firm had a policy in place at the time of the project so my insurance should cover that. It depends…. Your firm needs to have a policy in place at the time of the project and at the time of the claim. This is a claims made policy, the policy that is in place at the time of the claim is the policy that will cover the claim.

My client didn’t send me a notice of claim, they verbally demanded that I pay a specific amount to cover the issues, so I shouldn’t turn this into the insurance company? False, this is a demand even if it is verbal. Report this to the insurance company immediately. If the insurance company deems that it is not a demand then most insurance companies will assist on a pre-claims basis.

The Professional Liability policy will also cover my firm for general liability claims. This is false, your firms Professional Liability policy provides coverage for your firms design work. On the other hand a general liability policy is coverage for ‘trips and falls’.

If you are not sure about a question on your Professional Liability policy for architects/engineers please be sure to call or email your Professional Underwriters agent for assistance.common myths