What limits should my design firm carry on Professional Liability?

limitsWhat limits should my design firm carry on Professional Liability?  This is, ultimately, a business decision for your firm but here are a few guidelines to determine what makes sense for your business.

Does your firm have a contract requirement for a specific limit on your Professional Liability policy?  Not that this is always a driving force for limits on your policy but it is a guideline.  However, if your firm has limits that are reasonable and a contract has a higher limit requirement that doesn’t make sense for the project you may want to negotiate on limits.

What is the size of your firm?  Larger firms that are doing work on larger projects may need a higher limit on the policy. Adversely, if you have a smaller firm you may not need the higher limits that a larger firm requires based on the project types.

What makes sense for your firm financially?  Be sure that your firm isn’t paying for too much insurance that doesn’t make sense for your firm.  On the other hand don’t just get the lowest limit because it is the cheapest.

Can I change my limits if needed?  This question comes up often and the answer is yes your firm can change limits.  For example, if your firm continues to grow it is a good idea at looking at higher limits.  Or if your firm is doing larger projects, it is also good to increase the limits.

The bottom line is to have a Professional Liability policy in place and continue that policy so that your firm doesn’t lose prior acts coverage.  With regards to the limits, use these guidelines to determine the best course of action for your firm.  Please call or email your PUI Agent for any questions you may have.

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