Limits of Liability
Limits of liability on Professional Liability for architects and engineers. There are always questions with regards to limits of liability on Professional Liability policy. Here are a few of those questions that do come up and the response to those questions.
What limits of liability should my firm get?
This is always a good question and a difficult one to answer. The best suggestion is get the highest limits that make sense for your firm by asking yourself a few of these questions. 1. Do you have a contract requirement for a specific limit of liability? This is often a driving force for limits of liability your firm will get on a policy. 2, Are you doing project types that are considered higher risk? If so, it might make sense to get higher limits on the policy so that in the worst case scenario your firm has high enough limits for the claim. 3. What type of services is your firm offering? Speak to other architects and engineers in the industry to determine what limits of liability their firm is carrying may help in the decision making process. 4. What is affordable to your firm? Make sure you get limits that are going to best protect your firm and fits within a budget your firm is comfortable with. These are a few questions to help determine what limits of liability will work for your firm. Every firm is different and we don’t have crystal balls to know what a claim might be, but do what makes most sense for your firm.
Will my insurance company allow me to change limits within the policy year?
The answer is yes, most insurance companies will allow your firm to adjust limits of liability during the policy period. Check with your agent to find out if it is possible.
What if my firm changes limits of liability in the middle of a policy year?
This is a great question that we get often. If you start out with limit of liability of $1,000,000/$1,000,000 and increase to $2,000,000/$2,000,000? The limits you have at the time of the project are the limits that will be enforced at claim time. If you increase your limits that won’t necessarily mean that they will automatically be higher for all projects you have completed. It is based on the project dates and the date of the change of limits of liability.
There are often questions that come up with regards to the limits of liability. Be sure you discuss these questions with your PUI Agent.