Facts About Professional Liability Policies for Architects/Engineers
There are several policies in the market place and many different pieces of information to be aware of when it comes to Professional Liability policies.
Your firm may have heard the term hammer clause, with regards to Professional Liability policies. The hammer clause allows an insurance company to settle a claim without the consent of your firm. Keep an eye out for these clauses in a policies, this may not be the best fit for your firm.
Most Professional Liability policy claims are reported two to three years after substantial completion of a project. Although this will not be every claim, these are averages. Typically your firm will know if there have been issues on a project.
Most Professional Liability insurance companies offer risk management services such as contract review for insurability and pre-claims assistance. These services can be beneficial to help prevent claims. Check with your insurance company to find out if these services are offered.
Many insurance companies offer a mediation deductible credit in your policy. The policy wording may look similar to the following:
If the Company and the Insured agree to resolve a claim through voluntary mediation and the claim is resolved through voluntary mediation, the Insured’s deductible obligation for such claim will be reduced by 50% subject to a maximum reduction of $25,000.
The extended reporting period (ERP) or tail policies of most insurance companies will not meet the statute of limitations and repose in each state. The longest time period for an ERP in the marketplace is 5 years. While some statutes run as long as ten years.
There are many Professional Liability policies that will not exclude specific project types. With that, proceed with caution on certain project types and check to find out if and how they may affect your policy.
If there are any questions about what coverages are in your policies please call or email your Professional Underwriters agent for assistance.