There are many considerations when discussing a project in a location outside of the United States. Worldwide professional liability coverage for architects and engineers protects design firms against claims arising from wrongful acts, errors, or omissions committed anywhere in the world. However, policies handle international risks in two distinct ways: true worldwide coverage (where claims can be filed anywhere) and worldwide work with territory restrictions (where the work can be done anywhere, but the lawsuit must be filed in a specific country). The worldwide coverage will depend on the country that your firm is designing the project, and it will also depend on the contract that is drafted for the project.
It is important to consider critical contract clauses. When evaluating worldwide coverage, always review the “Suit Limitation” or “Territory” clause in the policy form. If your client contract requires you to defend yourself in a foreign local court, a policy requiring suits to be brought in the U.S. or Canada will leave you exposed.
To recommend the best policy structure, please share with your insurance agent:
- Where is your firm headquartered or domiciled?
- In what countries will the physical projects be located?
- Do your international contracts specify which country’s laws govern disputes?
It may be required to obtain a professional liability policy in the specific country, depending on the country, if your contract doesn’t specify the jurisdiction of the United States. For example, Mexico does not allow for professional liability policies that are not based out of Mexico.
In addition to verifying the professional liability policy would provide coverage, it is good to have an attorney in that country so that they understand the laws in that specific country.
Travelers Insurance Company does offer worldwide coverage https://www.travelers.com/resources/business-industries/design-professionals/how-to-choose-a-professional-liability-policy.
If your firm has any questions about worldwide coverage on a professional liability policy please call, or email, your Professional Underwriter agent for assistance.