What is an insuring agreement on architects/engineers’ insurance policies?

An insuring agreement is a legal contract between the insurance company and the entity being insured.  It is the portion of the policy that the insurance company promises to make payment to or on behalf is the insured entity.

Here are a few examples of insuring agreements.

Professional liability insuring agreement:

The Company will pay on behalf of the Insured all sums in excess of the Deductible that the Insured becomes legally obligated to pay as Damages and Claim Expenses as a result of a Claim first made against the Insured and reported in writing to the Company during the Policy Period or the Extended Reporting Period (if

applicable), by reason of a Wrongful Act, Pollution Incident or Network and Information Security Breach by the Insured or by any person or entity for whom the Insured is legally responsible, provided that:

(1) no such Wrongful Act, Pollution Incident or Network and Information Security Breach, or Related Act, Error or Omission, was committed prior to the Retroactive Date; and

(2) prior to the inception date of the first Policy issued by the Company, and continuously renewed, no Principal Insured had a basis to believe that any such Wrongful Act, Pollution Incident or Network and Information Security Breach, or Related Act, Error or Omission, might reasonably be expected to be the basis of a

Claim. The Company has the right and duty to defend any Claim against the Insured even if any of the allegations of the Claim are groundless, false, or fraudulent. Defense counsel may be designated by the Company or, at the Company’s option, by the Insured with the Company’s written consent and subject to the Company’s guidelines.

General liability insuring agreement:

We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury”, “property damage” or “personal and advertising injury” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury”, “property damage” or “personal and advertising injury” to which this insurance does not apply.

Each insurance company will have their own insuring agreement and they will vary with the different policies.  If your firm has any questions with regards to insuring agreements, please call, or email your Professional Underwriter agent for assistance.