FAQ on Professional Liability for Architects and Engineers
There are many questions that come up when discussing Professional Liability. The list below addresses some of those FAQ.
How does Professional Liability differ from General Liability? Professional Liability covers your firm for design errors and omissions. It is your ‘work’ on a project that the policy covers your firm for. General Liability policy covers for negligence outside of design; basically it is the ‘trips and falls’ coverage for your firm.
What is the retroactive date? It is the specific date on the Professional Liability policy; the insurance company will not cover an event or occurrence prior to that date. Your firm’s policy may have full prior acts coverage; this means that the carrier is providing coverage from the start of your firm.
What does claims-made mean? With Claims Made Insurance, coverage needs to be in place at the time the error is made and also at the time the claim is made, and it’s the policy in force at the time that the claim is made that will respond.
What is first dollar deductible? Some carriers will offer this deductible option on Professional Liability policies. This is also sometimes called ‘damages only’ deductible. It means that your firm only pays the deductible if there is a claim settlement. Adversely, with the straight deductible, your firm pays the deductible as soon as a claim is opened.
What factors is the premium based on? It is based on all of the factors in the application. Risk management of your firm, billings, services offered, project types, contracts, claims history, etc.
Professional Liability policies for design firms can pose many questions. Be sure to call or email your PUI Agent to get answers to your questions.