Deductible options on an architects/engineer’s professional liability policy -

This isn’t referring to the deductible amount, such as $5,000.  The deductible option is going to be either a first dollar defense deductible or a straight deductible.  There are some other deductible options in the marketplace but these two are the most common.  If your firm has a $0 deductible the deductible option will not apply.

First dollar deductible is defined as the following:

Subject to Section V. C. or D., the Deductible amount shown in Item 5.A. in the Declarations as the “Each Claim” Deductible is the Insured’s obligation for each Claim and only applies to the payment of Damages. The Deductible will be paid by the Named Insured. The Limits of Liability set forth in the Declarations are in addition to, and, excess of, the Deductible.

Meaning that if your firm must pay damages, you will then be responsible for the deductible.  If there are not damages paid out, then your firm is not responsible for the deductible.  First dollar defense deductible is a richer benefit on a professional liability policy.

If your firm has a straight deductible the wording may look something like the following:

The Retention shall apply to Defense Costs and Damages covered under this Policy. If, any Defense Costs or Damages are incurred by the Insurer prior to the Insured’s complete payment of the Retention, then the Insured shall reimburse the Insurer therefor upon request.

Meaning that if your firm has a claim, you will be responsible for the deductible as soon as a claim is opened, and the claims expenses begin.  This is a more common deductible for larger firms or firms with claims history.

If you have questions with regards to deductible options, please call or email your Professional Underwriters agent for assistance.