Covering Potential Negligence with Professional Liability Insurance for Architects & Engineers
Architects and engineers professional liability insurance is important because they are not protected as professionals by their general liability. General liability covers accidents that occur on the job site but that are not directly related to professional services. Claims filed due to negligence on a specific project and losses experienced by clients as the result of design flaws require businesses to carry this extra level of coverage.
While there are currently no laws that actually require architects and engineers to have professional liability policies, it is very important to sustain business growth. Clients prefer that there is this measure of protection when purchasing design services from a firm. Including it as standard with your normal liability will not only give you an added layer of financial security in the unlikely event of flaw in design documents that result in loss, but it will add more appeal to your business as well.
Not all Errors & Omissions policies are the same, so it is important to work with a knowledgeable and reputable broker when purchasing this form of coverage. While there are common inclusions, the exclusions within these types of policies may vary from insurer to insurer. Many companies do not cover losses that are resulting from mold, asbestos, pollution or other such factors that have less to do with design and more to do with the materials that are used.
These policies are referred to as “claims-made” policies. This is because the claim for any covered incident must be made within the time frame of coverage. This is different than general liability in that it will not honor claims that come after the end of coverage even though the event occurred while the policy was in full force.
Learning the ins and out of professional liability insurance can help you find the right coverage for your growing business. If left uncovered, issues relating to accidental negligence can cost you your reputation and the financial security of your business.