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Architects and engineers have tough and vital jobs – they design the structures where we all live, work, shop and play. As with almost every industry these days, there is sizable pressure to move faster. This increased pressure, coupled with leaner teams, still stemming from layoffs during the recession of 2008, is fueling a significant rise in mistakes during the design and build process.
Clients are looking to shift these risks to the professionals, and they want to be sure that shift will cover more of the potential damages. Because of this shift, the professions’ inherent need for precision, and rising legal costs, design experts have been asked to take on substantially more coverage for professional liability in recent years.
While owners used to be comfortable with the design team carrying $1 million to $2 million in coverage, we’ve seen that balloon to upwards of $5 million as the new standard. This is challenging for all architects and engineers, but particularly for smaller firms and newer designers. Despite clients and owners demanding more coverage, carriers are still uncomfortable underwriting that level of risk.
As brokers, we get to flex our creative muscles to solve this problem for clients. We might increase existing limit of liability, secure a separate excess policy or increase limits on a project specific excess basis from the existing insurer. Knowing the market, and the players – we can explore multiple approaches to respond to changing needs.
If you’re a new or smaller player in the architectural and engineering space, but have your sights set on larger jobs that will require larger limits, get your broker involved well ahead of time. If you’re discussing future potential coverage needs from the outset, your broker can get to work planning on your behalf and ensure your risk profile is positioned in the best possible way. And don’t forget – there are still ways to lower your risk from the outset. Your broker can help with that, too.
If you’re in need of smart, effective coverage for your next build, call the architects and engineers team at Risk Strategies. Drop us a line - email@example.com.