Estimated Premium Based on a New Project?

Can my architecture/engineering firm get an estimated premium on Professional Liability based on a new project?

This question comes up quite often to determine if a. it is worth it to precede with the project a b. how my firm can expect the premium will change.

There is not a simple and easy answer to the question.  Yes some insurance companies will provide an estimate but keep in mind that it is not at all a solid number and it can change quickly based on many factors.  They may not be able to provide an estimate if it changes what your firm does as far as project types.  Typically if it is a project type you already have they can provide an estimate based on the billings change.  Also keep in mind due to the many factors involved such as the project, when your firms renewal, and the amount of billings some insurance company will not provide an estimate.

When an insurance company is determining your Professional Liability renewal premium there are several factors that the companies use to come up with your firms premium.  The biggest factor is the renewal application, this includes information from the past fiscal year such as billings, project types, services, contracts used and clients your firm works with, etc.  Another premium factor is claims.  What is your firm’s claims history, how much was paid out, when was the claim (is it outside the companies parameters, 5 years? 10 years?) and lessons learned.

When your firm asks for an estimate the insurance company is providing an estimate based on the fact that not any of the other factors from the renewal have changed.  The estimated premium is just that, an estimate, because most of the factors of the renewal application and potentially claims will change at renewal.

As a reminder that if an insurance company is able to provide an estimate it is just that, because there are so many factors that go into determining a premium.  Please call or email your Professional Underwriter with questions.general liability

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