Definitions in a Professional Liability Policy for Architects/Engineers

Professional liability insurance policies contain a section entitled definitions.  While the definitions may not seem important, they establish the meanings of key terms in the policy.  The key terms typically are highlighted in both the definitions section but also in the policy details.

For example, in the definition of mediation, the term itself is highlighted but also the word ‘claim’.  This means that the word claim also has a definition.

“Mediation” means the voluntary and otherwise non-binding process in which a qualified, professional mediator, mutually agreed upon by the parties to a Claim and with the consent of the Company, intercedes to help the parties reach an agreement to resolve the Claim. Other dispute resolutions by litigation or arbitration are specifically excluded from this definition.

The word claim is also included as a definition:

“Claim” means a demand for money or services, including, but not limited to a complaint in a civil proceeding in a court of law or in an arbitration proceeding, received by an Insured arising out of one or more of the following:

(1) a Wrongful Act;

(2) Pollution Incident; or

(3) Network and Information Security Breach.

The policy definitions are important because if a term needs clarification, such as who is an insured, the definitions will clarify who an insured is.  This is especially true during the time of a claim, if there is an issue that were to come to question, the policy could clarify the term in the definitions section.

If your firm has questions about what would be covered and how it is covered, refer to the definitions section first and then clarify the policy itself.  The definitions vary with each insurance company.  If your firm has any questions about definitions please call, or email, your Professional Underwriter agent for assistance.