What is a deductible credit on Professional Liability for architects and engineers?

The deductible credit definition will vary with each insurance company and generally will be for early resolution of a claim or use of mediation.  Here are a few of the examples of the policy wording from insurance companies.

Example one:

If any covered Claim made against the Insured is fully and finally resolved, with the Insurer’s consent and agreement, through the use of Mediation, the Insurer will reimburse fifty percent (50%) of the each Claim Deductible paid by the Named Insured, up to a maximum reduction of $25,000. However, this Mediation Deductible credit is only available if, within thirty (30) days of the date of the Insurer’s request, the Insured provides the Insurer with a copy of the Written Agreement that was executed by the Insured and the Insured’s client prior to the Insured’s performance of the Professional Services giving rise to such Claim.

Only one such Mediation Deductible credit shall apply per Claim.

Example two:

Early Resolution Credit If negotiation or mediation of a claim results in a resolution of such claim within one hundred and eighty (180) days of the time it was reported to the Insurer in accordance with the Section of the Policy entitled CONDITIONS, the condition entitled The Insured’s Duties if There is a Claim, and such resolution includes an indemnity payment by the Insurer, the Deductible applicable to such claim will be reduced by 50%, up to $10,000.

Example three:

If the Company and the first Named Insured settle a Claim through voluntary mediation, the first Named Insured’s deductible obligation for such Claim will be reduced by 50% subject to a maximum reduction of $25,000. Deductible payments made prior to the application of the above credit will be reimbursed within 30 days of the resolution of the Claim. This reduction does not apply to any Claim resolved through voluntary or involuntary arbitration.

As always read your Professional Liability policy to understand what the deductible credit is for your firm.  If you have questions about deductible credits please call or email your Professional Underwriter agent.