Professional Liability Exclusions that Architects/Engineers Should Be Aware Of
There are some exclusions in Professional Liability policies, and depending on the insurance company and your firm, some may have more exclusions than others. Here are a few exclusions to pay attention to.
Insured vs. insured is a common exclusion among Professional Liability insurance companies. Essentially you cannot sue yourself. If your firm does a project that is owned by a covered insured then the insurance company will not cover that claim.
Contractual liability is a common request in contracts for architects/engineers. However it is not covered in the Professional Liability policy. Check your policy to find out the details of the exclusion but most commonly it is not covered.
Faulty workmanship exclusion in Professional Liability is universal with insurance companies. The reason being is that the actual construction is not covered. The purpose of the Professional Liability policy is to cover errors and omissions of the design, not the actual construction.
Claims that have previously been reported will not be covered under a current Professional Liability policy. If your firm has switched insurance companies and had reported a claim to a prior insurance company, the new insurance company will not cover that claim.
Sale or distribution of goods is not covered by the Professional Liability policy. This includes selling a design online; this is considered a sale of goods.
Insurance companies will not cover a nuclear incident. Here is an example of the wording in the policy:
based on or arising out of nuclear reaction, radiation, or contamination, under any circumstances and regardless of cause, within or originating from a site where a nuclear reactor is located or where nuclear waste or material is disposed.
As always, read your Professional Liability policy in its entirety to understand the exclusions included. If you have questions about the exclusions please call or email your Professional Underwriter agent.
