The Parts of a Professional Liability Policy for Architects/Engineers

There are several sections of a Professional Liability policy, all of which your firm should be familiar with.

Declarations pages – this is typically the first few pages of the policy that contains important information such as your firms name and address, policy number, policy period, limits of liability, deductible, premium, where to report claims, retroactive date and your insurance agents contact information.  Your firm may be asked to provide the dec pages of the policy; these are the pages and information that are being requested.

Insuring agreements – this section details what your firm is covered for in the policy.  It details the coverage, defense, settlement and exhaustion of limits.  The insuring agreement is what the insurance company has agreed to cover for your design firm.

Limits of liability and deductible – this portion of the policy provides details as to the limits of liability, for example, each claim and aggregate.  Additionally, what the each claim deductible is and if there is an aggregate deductible.  This section also provides details with regards to the medication deductible credit, if there is one and supplementary payments such as pre claims assistance and defense of disciplinary actions.

Definitions – most policies have a definitions section of the policy.  This is so terms such as claims expenses and an insured can be defined.  This part of the policy is referred to quite often to have an understanding of that specific terms mean to each insurance company.

Exclusions – most policies have an exclusions element of the policy.  This lets your firm know what the policy will not be covering.  Things like criminal acts, insured vs. insured, construction claims or employment claims.

Conditions – this section spells out what your firm is responsible for.  For example, reporting the claim, assistance and cooperation and reporting any changes to your firm.

Extended Reporting Period – if your policy has an option for an extended reporting period or tail policy, this is the portion of the policy that will provide the information.  Also, some policies have an automatic extended reporting period; it is defined in this section.

Endorsements – if there are any state specific endorsements, endorsements for deductible or any other endorsement that has been agreed upon with the insurance company will be towards the end of the policy.

As always, be sure to read the policy in its entirety to have an understanding of what your firm is covered for.  If you have any questions please call or email your Professional Underwriters agent.