South Western Insurance Group Limited’s exclusive Professional Liability & CGL combined facility has been providing Architects and Engineers with peace of mind for many years. And while no insurance product will prevent typical claims from happening inside the A&E space, senior underwriter Darlene Hazzard says her company’s combined coverage will protect professionals against the costs those claims often entail.
“A&E claims can go on for a very long time,” remarks Hazzard, “especially if they are large, involve multiple defendants, and end up going to trial. I have been underwriting for almost fifteen years, and we still have open claims here that pre-date my time. The fact is that the longer they are held up in court, the costlier these claims can become.”
Architect and engineer clients tend to fall under the same professional umbrella where typical claim types are concerned. In both classes, a claim may arise from:
- Design Errors related to mistakes made in drawings or structural designs,
- Inspection Errors that occur when an item is missed during a professional inspection, and
- Third-party Claims brought against everyone involved with a particular project – regardless of how briefly or indirectly
The E&O portion of South Western Insurance Group Limited’s specialized A&E product addresses claims resulting from an insured’s professional services, while the CGL portion extends to claims of bodily injury or property damage.
“We work with a third-party administrator who investigates our A&E claims, gets lawyers involved, and interviews our clients directly,” explains Hazzard. “But part of our role as facilitator includes keeping records related to potential claim action as well. As soon as an insured becomes aware that a questionable incident has taken place, that event should be reported to us as a circumstance while the details are still fresh in their mind – even if they do not believe it will turn into a formal claim.”
The thing about A&E clients, Hazzard adds, is that they can perform work today – then turn around and be involved in a claim related to that work years from now. “Even if nobody is laying blame at the moment, it is always best if a client lets us know when something kind of went wrong. That way, if a claim does rise up down the road, all the key information will be in their file.”
One of the most common traps Hazzard sees A&E clients falling into is opting for inadequate policy limits. “Some insureds’ organizations do not require them to carry E&O, so they look for the lowest limits they can get. But $250,000 will not go very far if you are hit with a sizeable claim. In the years it can sometimes take to settle, defence costs can grow very quickly. And that is why – even on policies with a $1 or $2 million limit – we offer the option of costs in addition.”
Adding costs to an insured’s A&E coverage, Hazzard says, goes a long way toward preventing limit erosion by defence costs and other legal expenses. And that means a policy’s limit can be reserved for paying off any actual claim settlement.