Selling My Firm – What To Do

What to do if I am selling my architecture/engineering firm or shutting it down altogether?

There is a lot to consider when selling your firm or shutting it down.  Insurance is one of the factors to consider.

The first item when selling or closing your firm is consulting an attorney as to the legal implications.  After that it would be time to discuss your insurance.  It is always suggested to review your contracts with your clients to determine what insurance policies must remain in place.

Workers’ compensation, if your firm is selling, you will want to have in your agreement how the workers’ compensation policy will proceed.  If your firm is closing, then you can cancel the workers compensation policy on the day your firm is closing.

For the business owner policy, it will be the same considerations as the workers compensation.   However, if your firm is renting office space, you will need to review your firm’s lease to verify that you are not in violation of the contract.

With regards to the professional liability policy, this becomes a little trickier.  Your firm will want to consider an extended reporting period (tail policy).  This is an extended period of time that your firm can report a claim on your firm’s professional liability policy.  This will vary with each insurance company, but the maximum time period available is typically five years.  The extended reporting period is not renewable, and all projects must be complete before purchasing the policy.  If your firm is being purchased, the agreement between the selling firm and the purchasing firm will determine if an extended reporting period will be needed.

Be sure to review your contracts and insurance policies before the selling or closing of your firm.  If your firm has any questions with regards your firm’s insurance policies, please call, or email, your Professional Underwriter agent for assistance.