What is an insuring agreement in an architects/engineers professional liability policy?
An insuring agreement is a legal contract between an insurance company and your architecture/engineering firm. It is the insurance companies promise to make payment on behalf of your firm for an error or omission. Here is an example of an 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.
The insuring agreement lays the groundwork for the professional liability policy. If you have any questions about a professional liability policy insuring agreement please call, or email, your Professional Underwriter agent for assistance.