In this day and age when money can be tight, it is good to know what can influence your professional liability renewal premium.
The whole application is taken into consideration when determining your firm’s professional liability renewal premium. There are some factors that can have a larger effect on your renewal premium.
Claims are always a consideration when the insurance company is determining your firm’s professional liability renewal premium. Not to say that it always will have an effect, but it is a consideration. It will depend on the total amount of the claim. Meaning the expenses and indemnity paid out by the insurance company on your behalf. What the insurance companies look at is the total premium paid in, typically looking back 5 years, and the total claim paid out. With that the insurance company has a loss ratio and this can have an effect on your firm’s renewal premium. Pre-claims typically will not affect your firm’s renewal premium.
Your firm’s billings can have an effect on the renewal premium. Most insurance companies use an average, but that average is different with each insurance company. Some use a three-year average, and some use a three-year average that includes the projected billings. If your billings increase in the averages, this can increase your professional liability renewal premium.
Changes to services offered or project types can have an effect on the renewal premium. If your firm now includes structural engineering and previously your firm was a mechanical engineer, this can increase your premium. Also, if your firm was only doing single family residential and now have included multifamily projects, this could increase your premium as well. This varies with all insurance companies but can certainly influence the premium.
If you have any questions about what effects your firm’s professional liability renewal premium please call, or email, your Professional Underwriter agent for assistance.