How does my firm know if we have a Professional Liability claim? There are quite often issues on projects, it is important for your firm to know when it is a claim.
A claim, as defined by an insurance company is a demand for money or services, a civil proceeding commenced by service of a complaint or similar pleading or written request to toll or waive a statute of limitations relating to a potential civil or administrative proceeding. The claim does not have to be in writing it can be a verbal demand as well.
If you do receive such demands report it to the insurance company immediately. Once the claim has been set up the insurance company may request backup documentation for the project such as the contract, email communications, change orders and drawings. Provide all information requested by the insurance company as soon as possible.
If your firm doesn’t receive a ‘claim’ as defined above; but have a situation or circumstance with a project you can still report it. This may come under a pre-claim, in which the insurance company can provide assistance to resolve the issue. Pre-claims can be defined as a written or verbal threat to make a claim, subpoena for documents or testimony, your firms awareness of an actual or alleged error, even though no claim has been made or your firm feels sufficiently worried about a project that you think may result in a claim. The insurance company provides pre-claims assistance in the hopes that it may deter a full blown claim for your firm.
The bottom line of Professional Liability for Architects and Engineers is that if you are not sure if it is a pre claim or claim you should call the insurance company or your insurance agent. It does not cost your firm anything to set up a pre-claim and it is better to make the insurance company aware of the circumstance before it becomes a larger situation.
As always, read your policy to better understand your policies claims and pre-claims assistance. If you have questions please call or email your Professional Underwriters agent.