Why is my design firm required to provide an application to obtain new or renewal quotes for Professional Liability?

Professional Liability is a different type of policy from other policies in the marketplace and needs to be re-rated every year or two.

Professional Liability insurance companies determine the new or renewal premium based on all of the factors included in the application.  And because your firm changes from year to year the insurance companies will re-evaluate your policy premium every year.

Professional Liability underwriters assess the risk of your firm based on the renewal application.  What they are looking at are the project types, billings, overall risk management practices, client types, claims history, etc. to determine if your firm’s risk has changed and charge the appropriate premium based on those characteristics.

Professional Liability is unlike policies such as General Liability and Workers Compensation that the risk generally doesn’t change with these policies much over a year’s time.   With General Liability, your firm doesn’t move more than once a year, if at all.  Workers Compensation, there may be salary changes but those are determined when your firm completes the audit.  These types of policies to not need to be reassessed because there are very few changes, if any, will occur in a year.

With the Professional Liability renewal application the more details your firm provides, to the insurance companies, the better.  If you have had claims give details on the claim(s) and the lessons learned.  If something drastic has changed with your firm, please describe why.  The more information provided to the insurance company the better they can determine a renewal premium.

If your firm needs help with the Professional Liability application or have questions about how the insurance companies determine a premium please call or email your Professional Underwriters agent.