This is a difficult question to answer because nobody can predict the future. There are a few guidelines to keep in mind when considering limits of liability.
The size of your firm will be a consideration when determining what limits of liability for your professional liability policy. If your firm is a larger firm then larger limits of liability, such as $5,000,000 each claim and $5,000,000 aggregate make sense. This limit of liability would be larger than a small firm would be able to obtain.
Is your firm growing from a smaller firm to a larger firm? If so, you may want to consider increasing your firm’s limits of liability. Your firm may have grown over the years and a larger limit of liability would be justified.
Does your firm have a contract requirement for higher limits of liability? From time to time the requirements in a contract will guide your firm to a larger limit of liability. Consider the project, does the limit of liability make sense for the project? If the project’s construction value is $1,000,000 and the contract requires $5,000,000 each claim and $5,000,000 aggregate, this doesn’t correlate. The limits of liability requirement will then need to be negotiated.
Does the insurance company offer a larger limit of liability for your firm’s size? The insurance company may be a determining factor as to what limits of liability your firm may be eligible for. If your firm’s billings are $500,000 for the past fiscal year and your firm is asking for $5,000,000 each claim and $5,000,000, this may not be available. Also, different insurance companies have different maximums as far as limits of liability that are available.
If your firm has any questions with regards to limits of liability on a professional liability policy please call, or email, your Professional Underwriter agent for assistance.