Tips to Save Money on Your Professional Liability Policy Premium
There are a lot of ways to save money on your professional liability policy premium. The obvious one is not having any claims. However this is sometimes out of your control as you can be pulled into a claim just by being part of a project even if you weren’t negligent. Some of the more intentional ways to save money are as follows.
- Use an Independent Agency – Independent agencies have access to many carriers and can “shop” your application to get the best coverage and the lowest premium.
- Use carriers that provide discounts if you bundle your coverages. So for example you have your Professional Liability, General Liability, Workers Compensation and Umbrella all with the same carrier they will give you a discount.
- Always use written contracts. This one is very important for many reasons. If you use less than 75% of written contracts some carriers will not even provide you with a quote. Thus blocking you from potential money saving quotes. Some will provide you with a quote but you won’t receive the money saving credit for using written contracts 100% of the time. Really the most important reason to use written contracts is the money this can save in keeping you out of a claim situation. A written contract lets both sides know what to expect through out the project. It is a very important tool. It is the very first thing that your claims adjuster will ask for when facing a potential claim situation. It can sometimes quickly exclude you from a claim or at least limit your exposure.
- Use a Limitation of Liability Clause in your contacts. This goes hand and hand with the above written contract tip. You should have a Limitation of Liability Clause that limits your exposure to your fees. Select an approximate and equitable number in relation to the size of your project . If your client won’t agree to that you can try to limit it to your professional liability limits. This will not only save you money by preventing you from being in a large claim but many carriers provide credits to Design Professionals that you use this type of clause in their contracts. An example of a limitation of liability clause is “Notwithstanding any other provision of this agreement and to the fullest extent permitted by law, the Owner agrees that the total liability, in the aggregate, of the Design Professional and the Design Professional’s officers, directors, partners, employees, agents, and consultants, to the Owner, its subsidiary and/or affiliated companies and their respective officers, directors, employees, agents and anyone claiming by, through, or under the Owner for any and all injuries, claims, losses, expenses, damages whatsoever arising out of, resulting from or in any way relating to the Design Professional’s services, this Agreement or any Addenda, from any cause or causes, shall be limited to the proceeds of the Design Professional’s available insurance coverage.” Limitation of liability clauses should be drafted by local legal counsel that experienced with your jurisdiction.
- Attend Carrier Risk Management Webinars – Many carriers provide risk management classes that if taken by you and your employees they will give you credits towards your professional liability premium. You are not only educating your employees to further prevent claims but also saving money at the same time. A lot of carriers will even provide Continuing Education credits.
- Sending in Your Application to Your Agent in a Timely Manner- Sending your application in at the last minute to your agent prevents them from being able to properly market your application. This in turn prevents you from potentially saving money on your premium.
If you have any questions, need more information or would like a quote for your insurance please contact your Professional Underwriters, Inc. agent or contact us here.