Frequently Asked Questions

1. Why should I consider coverage from the Arrowhead Design Insurance Division?
2. What is professional liability insurance?
3. Who needs professional liability insurance?
4. What's the difference between professional liability insurance and general liability insurance?
5. Is professional liability insurance required of architects, engineers and environmental consultants?
6. How much insurance do I need?
7. What do I look for in professional liability coverage?
8. How do I know which policy and insurance company to select?
9. How do I find a specialist agent?

1. Why should I consider coverage from the Arrowhead Design Insurance Division?
   

   The staff at ADI has more than 150 years of combined experience serving architects, engineers and environmental consultants just like youOur management staff and underwriters know your business inside and out and can provide high-quality, affordable insurance and risk management programsOur program is backed by the financial strength of Hudson Insurance Company, an A.MBest Company “A” (XV) rated insurance company

2. What is professional liability insurance?
   

   Professional liability insurance protects service firms like yours from liability risks due to negligent acts, errors or omissions while performing their professional services. In fact, you might have heard it referred to as "errors and omissions" insurance. It's the same concept as the malpractice insurance that covers physicians and lawyers.

3. Who needs professional liability insurance?
   

   Virtually any individual or firm that provides professional services would be wise to carry PL insurance. Professional liability risks are not covered by your general liability policy.

4. What's the difference between professional liability insurance and general liability insurance?
   

   As stated above, professional liability insurance covers your negligent acts, errors or omissions when performing your professional services - an error in design documents that causes a loss, for example. General liability covers liabilities outside of the performance of professional services - for example, if someone slips and falls while visiting your office. Another important distinction is that professional liability policies are "claims-made" policies - the incident has to occur and be reported during the term of the policy in order to be covered. General liability policies are "occurrence" policies - the event is generally covered as long as it occurred when the policy was in force, even if a claim doesn't occur until after the policy expires.

5. Is professional liability insurance required of architects, engineers and environmental consultants?
   

   Legally speaking, no. There are no laws that require you to carry PL insurance. However, many clients require that their consultants have such coverage. So, from a business sense, PL insurance is required in order to optimize your chances to succeed and grow.

6. How much insurance do I need?
   

   That will depend on your individual circumstances, including factors such as the size of your firm, annual billings, area of practice, number and types of clients and projects, and so forth. As a ballpark, most small firms carry from $500,000 to $1 million in coverage, midsize firms from $1 million to $5 million, and larger firms, $5 million or more.

7. What do I look for in professional liability coverage?
   

   You'll likely find that most professional liability policies are very similar. However, there may be subtle but important differences - for example, some policies may have coverage exclusions or limitations for pollution, mold, asbestos, and other liabilities. Equally important, consider the financial strength of the insurance company issuing the policy. We suggest you look for an insurer with an A.M. Best rating of "A (Excellent)" or higher. Also ask about the insurance company's claims expertise and dedication to loss prevention services.

8. How do I know which policy and insurance company to select?
   

   Your best advice is to secure the services of a specialist agent or broker who has extensive experience serving architects, engineers and environmental consultants. A specialist agent will not only help you find the best insurers and policies, he or she can provide ongoing risk management advice and consultation after the purchase is made. And the quality of those ongoing services can be as valuable as the policy itself.

9. How do I find a specialist agent?
   

   One good method is to ask your peers for recommendations. Ask them what type of services their agents provide. Do they deliver risk management education programs that qualify for continuing education credits? Do they offer contract review services? Do they assist in client negotiations? Are they active with your state associations? ADI will also be happy to recommend a specialist in your area.