Professional liability insurance coverage demands special attention due to the unique nature of the coverage that is provided. Understanding your policy will empower you with the precise knowledge of exactly what you are paying for and may even help to improve your firm's profitability. In addition, your understanding of professional liability insurance can help you purchase appropriate coverage in order to reduce the impact of claims.
Purchasing professional liability insurance is a very important decision. The premium for professional liability insurance can range from one to two percent of a firm's revenues or even more. There are many insurance brokers dedicated to serving your industry. You can also consult an insurance broker via https://ri-insurance.com/.
What Does a Professional Liability Policy Cover?
In general, the policy covers actual or alleged negligence in the performance of professional services. Failure to meet your applicable industry's standard of care will typically trigger negligence. Professional services typically include Architecture, Interior Design, Engineering, and Land Surveying.
Some policies also include Environmental Consulting, Construction Management, and Technical Consulting as covered professional services. Insurance policies can differ widely. It is important to know the professional services that you are covered to perform.
Another item worth mentioning is that many client-written agreements include adverse indemnification wording that may place your firm in the unfortunate position of being uninsured if such indemnification is triggered. Many indemnification clauses will make the design firm responsible beyond the applicable standard of care.