insurance terms

Increased Limits of Liability on Professional Liability

Increased limits of liability for architects/engineers on professional liability-

There has been an uptick in the number of requests for higher limits for design firms on their professional liability policies.  There are several ways to obtain quotes as detailed here.  Keep in mind the risk must still be underwritten, so it is not guaranteed that the limits of liability can be obtained.

Your firm may be able to increase the overall limits of liability on your practice professional liability policy.  You will need to provide the limits of liability requested, the reason for the limits and potential billings of the project, if that is the reason for the requested increase.

Another avenue to obtain higher limits of liability is to get a project/client endorsement to your current policy.  For example, your firm has $1,000,000 per claim and $1,000,000 aggregate and the project/client is requesting $2,000,000 per claim and $2,000,000 aggregate.  The insurance company may be able to offer a project/client endorsement for the extra $1,000,000 per claim and $1,000,000 aggregate limits of liability.  An application for the project/client will be requested, along with a copy of the contract for the requested higher limits.

Another way to obtain higher limits of liability is an excess policy.  This is a separate policy from your base practice policy.  It will likely be from a different insurance company but provides the additional limits needed for your firm’s contract with your client.  For example, your firm’s limits of liability is $2,000,000 per claim and $2,000,000 aggregate and the request is for $5,000,000 per claim and $5,000,000 aggregate.  Your firm will complete the excess policy application to obtain quotes for the additional $3,000,000 per claim and $3,000,000 aggregate.  Again, this is a separate policy and is excess over your base professional liability policy.

If your firm has any questions with regards to professional liability limits of liability please call, or email, your Professional Underwriter agent for assistance.

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