Policy Premium Increased?

Why has my Professional Liability policy premium increased?  Architects and engineers often have this question, because who wants to pay more in premium.  However, there could be several different reasons for an increase.

The Professional Liability insurance companies require a completed application prior to providing a quote for insurance.  The application includes questions such as billings for past fiscal years and projected billings, the types of projects your firm was involved with, the services your firm provides, contracts used, and general risk management practices.   In addition to the application the insurance companies may ask for a claims history report (loss runs), your firms website and resumes of principals.  If there are claims, the insurance companies may ask for details on each claim, such as what transpired with the claim and lessons learned from the claim.

From all of the information collected by the insurance company they will determine the renewal premium.  Some of the factors that could increase the premium are an adverse claims history, increase in billings from year to year and a change in the overall services of the firm.

Keep in mind that it may be several factors that are affecting the premium, not just one.  However, if all other factors have remained that the same and there was a claim in the past year, that may be the basis for the increase in premium.

The best way to determine why your premium has increased is to have a discussion with your insurance agent.  Your insurance agent will have those conversations with the insurance companies and will provide that information to your firm.  The insurance companies typically are fair in their premium increases and are fair market value.  If you do have questions please call or email your Professional Underwriters agent.