Understanding deductibles on an architects/engineers professional liability policy-
There are many deductibles options when looking at a professional liability policy.
The deductible is the amount of money your firm will be required to pay before the insurance company will pay a claim. For most small architecture/engineering firms most insurance companies offer a $0 deductible. Regardless of the claim, if your firm is a small firm, you will not pay a deductible. The deductible amounts increase as your firm size increases or has more challenging services, project types or past claims.
The question is often asked, when trying to save money on a policy premium, if my firm increases the deductible will the premium be lower. The answer is it depends. It depends on the amount of the deductible your firm is increasing to, and it also depends on if the insurance company can offer a higher deductible based on your firm’s application.
There may also be a deductible option on your firm’s professional liability policy. With the first dollar deductible your firm will not pay the deductible unless there is an actual claim settlement. If your firm does not have a first dollar deductible, your firm will pay the deductible as soon as a claim is opened.
There may also be deductible credits for your firm in the event of a claim. This will, of course, vary with each insurance company. These credits may be for an early resolution deductible credit or a mediation deductible credit. Refer to your firm’s policy to determine what type of credit may be available.
There are a lot of ins and outs of deductibles. Deductibles can also offer premium savings. If you have any questions with regards deductibles and the deductible options please call, or email, your Professional Underwriter agent for assistance.