The key to architect professional liability insurance is having a specific plan written up that focuses directly on your firm’s current situation and risk levels. These levels are different from one company to the next. It takes special knowledge of the industry and an understanding of the risks involved to create the perfect professional liability insurance policy.
That’s where we come in. We’ve spent years working in this industry, and we know how to design our policies perfectly for every firm. We are the best professional liability insurance company for architects because we can access specialty carriers, we offer free risk management services, and we give you free consultations and quotes.
Don’t just settle for some cookie-cutter plan. We work only with A-rated carriers, we have a lot of flexibility in finding the perfect plan since we’re independent, and we can give you the architect errors and omissions insurance you’ve always needed.
What is covered under professional liability insurance?
Professional Liability (Errors & Omissions) insurance covers you during times a client or 3rd party demands services or money for an alleged wrongful act (or mistake) by you or your firm. Typical demands covered under professional liability insurance can include:
- An actual lawsuit from a client claiming your service or design contained an error or omission that has now created Bodily Injury, Property Damage and/or Financial Loss
- A lawsuit from a 3rd party claiming Bodily Injury, Property Damage and/or Financial Loss from either your mistake or a project you worked on
- A nasty email (or letter) from a client asking you to fix a costly mistake
As you can see, Professional Liability is meant to protect a professional in the performance of their professional services. Professional services can include, but are not limited to:
- Architects & Engineers
- Environmental Consultants
- Doctors & Dentists
- Real Estate Agents & Appraisers
- Health Care Professionals
Many Professional Liability policies only cover economic or financial losses of third parties. This is fine for many professionals like business consultants, real estate agents or accountants. However, professionals like architects and engineers require bodily injury (BI) and property damage (PD) coverage to be included due to the nature of their services.
Some carriers are now starting to include Cyber & Network Liability as a part of their policy to help provide some coverage for firms in delivering their services digitally.
Understanding the differences in coverage between the various policy forms of carriers can be complicated. We have access to over twenty (20) professional liability carriers that have tailored policies for design professionals and consultants.
What does professional liability cost?
Professional Liability can cost anywhere from $700 per year to 5% of your Gross Revenues depending on what type of Professional Liability policy you want and the Services you provide.
There are so many different insurance carriers offering Professional Liability these days and there can be serious differences between what is covered under each carrier’s policy that it makes comparing policies a bit complicated.
However, we can help you decipher the differences between the various policies by giving you clear choices based on your desired coverage and price point.
What is the difference between professional and general liability insurance?
In short, Professional Liability (errors & omissions) covers you for your Professional negligence. General Liability covers you for claims involving Non-Professional negligence.
Professional negligence are claims dealing with your consulting, services or design work as an accountant, lawyer, engineer, etc.
Non-Professional negligence are claims dealing with your premises or business operations. An example is a client slipping-and-falling at your office. It was during business operations, but did not involve the delivery of your professional services.
EX: An architect designing a house is in need of Professional Liability to protect them for their design work. However, the general contractor that is building the house is in need of General Liability.
There are often other misunderstandings between Professional Liability and General Liability insurance, which can be seen in contracts or agreements between you and your clients. Many times, agreements will include requirements that are appropriate for General Liability, such as naming your client as an “additional insured”, but are not appropriate or unavailable under the Professional Liability policy. This is why it is invaluable to have an experienced insurance agent on your team that can review your agreements in a timely manner and represents your best interests.
Another area of confusion between Professional Liability and General Liability is in how claims are reported. Most General Liability policies are written on an “occurrence” basis. Coverage on an occurrence policy is determined by the date that the situation giving rise to the claim occurred. Not when the claim is reported with the carrier.
Professional Liability policies are written on a “claims-made” basis. This difference is significant. Under a claims-made policy, the availability of coverage is determined by the date that a claim is first reported. Below is an example on which carrier responds under the different policy types:
Claims-Made—A new claim is filed in 2019 while XYZ Insurance Company’s policy is in effect. Therefore, XYZ Insurance Company would respond to the claim even if the insured was with a different insurance carrier back in 2015 when the event leading to the claim occurred.
Occurrence—The event leading to the claim occurred in 2015 while ABC Insurance Company’s policy was in effect. Thus, ABC Insurance Company’s would respond to the claim even though the insured is currently covered by XYZ Insurance Company when the claim is filed in 2019.
Do I need professional liability?
The need for Professional Liability (E&O) is created by the type of services you are providing. Depending on the type of services you are providing, there is usually not a legal requirement to carry Professional Liability. The need is typically driven by either:
- Your desire to protect yourself and your firm
- Contractual requirements with a client
Many people may argue that purchasing Professional Liability just puts a “target” on your back for lawsuits. And this may be true in a small number of cases. But eventually, you get to a point in your career and in the maturation of your firm that you are not willing to chance it. Protecting your firm becomes important to you and your employees to know they are covered in the event of a mistake, or just getting roped into a bad situation because you are involved in the same project.
If you are interested in learning more about how Professional Liability can protect you during a claim, feel free to Contact Us.
What is the purpose of professional liability?
The purpose of Professional Liability (E&O) is to provide you with protection from financial loss during a claim or lawsuit against you and/or your firm. Protection includes:
- Organization of the legal team to defend you in the lawsuit
- Advice on “next steps” and what to do and what not to do
- Claim and court expenses including expert witnesses
- Reimbursement of lost earnin for depositions and court appearances
- Payment on any damages awarded the claimant
All of these costs and expenses are within the policy limits and are subject to your Deductible. It is important that you work with a Risk Management specialist to help you understand the various policies by giving you clear choices based on your desired coverage and price point.
Why is professional liability important?
Professional Liability is important because it can mean the difference between shutting down your business due to a costly claim and keeping your doors open because you have transferred the cost of the claim to the insurance carrier.
A second, and maybe less important, the reason is that there are times a client may require Professional Liability as a contractual requirement.
Customized Architect Professional Liability Insurance Programs Designed for You
While many professional liability policies only provide coverage for financial or economic losses sustained by third parties, architect professional liability insurance companies know the importance of covering liability for property damage and bodily injury. For example, if a person injured in a building sues the property owner and that owner, in turn, blames the architectural or engineering business, that business will have liability protection.
Our insurance professionals do a lot more than find you a good specialty insurance policy. We provide a full-service relationship that includes:
- Get to know your business to determine where it’s underinsured or uninsured.
- Assessing your required coverages and limits.
- Providing ongoing customer support to help you minimize risk.
- Regularly reassessing your processes and insurance needs to make sure that you have the engineering or architect errors and omissions insurance coverage you require as your business grows and changes.
Lower Costs, Identical Coverage
You’ll quickly see that one of the biggest perks of getting a professional liability insurance policy from us is that the coverage is identical to the coverage you have now, but it simply costs less. In some cases, we can even get you better coverage, upgrading it instantly, and still cut the costs. Don’t assume all coverage is the same or that you have to pay more to get a better plan. By working with the best carriers in the professional liability insurance industry, we’re creating a new and better way to buy architect errors & omissions insurance. It’s time that you and your firm took advantage of these changes.
Contact Risk Specialty Now
While our architect professional liability insurance company is based in Texas, we are proud to service additional areas in the Gulf Coast and Oklahoma. Our agents can get a free architect professional liability insurance quote, with no strings attached. We’ll do a free consultation first to get to know you and to understand your firm’s needs.