How to choose a professional liability (PL) insurance company for my engineering or architecture firm, also known as Errors and Omissions (E&O)—requires evaluating a carrier’s industry-specific expertise, financial stability, and the breadth of their policy language. Unlike general liability, Professional liability policies for architects and engineers (A&E) are typically “claims-made,” meaning the policy must be active both when the error occurred and when the claim is filed.
Key Factors for Selection
When comparing these carriers, focus on these critical policy and service components:
- A.M. Best Rating: Ensure the carrier has a high financial strength rating (e.g., A or better) to guarantee they can pay out long-term claims.
- Retroactive Date: Verify the policy covers “prior acts” reaching back to your firm’s inception. This is vital when switching carriers to avoid coverage gaps. Several insurance companies may refer to it as “full prior acts”
- Pre-Claim Assistance: Look for carriers that offer free help to mitigate potential issues before they become formal lawsuits. High-quality carriers often do not trigger your deductible for this service.
- Policy Exclusions: Review “specimen policies” for exclusions related to specific project types (e.g., residential vs. commercial), mold, asbestos, or international work.
- Deductible and Limits: Confirm the insurer can provide the limits required by your firms largest client contracts (typically $1M to $10M+) and whether defense costs “erode” those limits or are paid in addition to them.
- Contract review services – Some insurance companies offer a free contract review service. The contract review is for insurability, not for legal purposes.
Questions to Ask a Specialized Broker
Because A&E insurance is a niche market, consulting an independent agent who specializes in design professionals is highly recommended. Questions to ask the specialized agent:
- Does this policy include a “hammer clause” that forces me to settle a claim against my will?
- Is cyber liability included, or must it be a separate endorsement or a stand-alone policy be purchased?
- What premium credits are available for attending risk management seminars?
- Does the policy cover joint ventures or sub-consultants?
Carriers for Architects & Engineers
Several insurers are consistently recognized for their specialized A&E programs that work with Professional Underwriters Agency.
- Travelers: https://www.travelers.com/business-insurance/architects-engineers
- The Hartford: https://www.thehartford.com/business-insurance/midsize-architect-engineer
- Great American: https://www.greatamericaninsurancegroup.com/about-us/business-operations/product/professional-liability/design-professionals-liability-insurance
- Victor/CNA: https://www.victorinsurance.com/us/solutions/design-construction/architects-engineers.html
- RLI Insurance: https://www.rlicorp.com/specialty-insurance/professional-services-firms/design-professionals
If your firm has any questions about a professional liability insurance company for engineers and architects please call, or email, your Professional Underwriter agent for assistance.