What are claims trends among Design Professionals?

claims trendsWhat are claims trends among Design Professionals?  While the market is constantly evolving and changing claims trends have held steady in recent years with residential projects.  Projects such as condos, single family homes, town homes and apartments are the projects that are having the highest frequency (amount of claims) and severity (dollars paid out with the claim).

The residential project market did slow in 2008 but has made a reemergence in recent years, as have claims.  Many of the insurance carriers are reporting that in recent years the claims frequency of residential claims is about 35% and severity is at about 40%.  Architects are having the highest amount of severity in the residential category and structural engineers are seeing the most frequency.  Overall the claims with the highest frequency and severity are with condo projects.  Single family homes, townhomes and apartments are also experiencing higher severity and frequency compared to non-residential projects such as office building, hospitals and schools.

Some of the driving force of the claims is State laws that were written to protect the consumer.  Also, the risk management level of residential projects tends to vary from other types of complex projects like an office building.  It is vital that your firm, if working on a residential project, have a strong contract in place and quality control guidelines for each of these types of projects.

While all claims cannot be avoided and sometimes errors to occur on a project, there are tools available to steer clear of those claims.  First is with a good contract and second making sure all the i’s are dotted and t’s are crossed when working on the project.  For risk management tools please contact your PUI Agency.

Previous Post
First vs. Third Party Cyber Coverage
Next Post
Spring’s top 3 perils causing Auto insurance claims