Questions Design Firms Ask Us, Answered
Real questions from architects and engineers, rewritten without names or details. Answers are general; your policy and your contract always control.
Claims and complaints
A client complained and it might go legal. Should I tell my insurer now, even if it turns out to be nothing?
Usually, yes. Most professional liability is claims-made, and many policies let you report a potential claim, often called a circumstance, before anyone makes a demand. Reporting early does not admit fault, and it gives the insurer a chance to help.
I reported a claim and only got an automatic reply. What happens next?
Insurers usually acknowledge the notice, assign a claims professional and then reach out, often within a few business days. If the client has set a deadline, tell your agent so they can follow up. Until then, do not admit fault or make offers.
The client threatened to report me to the licensing board. Does insurance help with that?
Some design professional policies include defense coverage for licensing board or disciplinary proceedings, often with a separate, smaller limit. Fines and penalties are usually not covered. Report the threat along with the dispute.
Our engineer offered to pay for the fix to keep the client happy. Is that okay?
It may be the right business move, but many policies say not to make payments or admit liability without the insurer's consent, and may not reimburse payments made without it. Report first, then make the offer once the insurer agrees.
The fix is a bigger unit. Does the design firm have to pay for all of it?
Not necessarily. Under the idea of betterment, an owner generally should not end up with more than they would have paid for if the design had been right the first time. What usually gets negotiated is the extra cost of making the change late.
We're a design-build firm and got a defect claim. Do we report it to general liability or professional liability?
Often both. Workmanship and physical damage are usually general liability questions, and design or oversight is usually a professional liability question. Report to both and let the insurers decide.
Contracts and certificates
The neighbor's building wants us to show no height, explosion or collapse exclusions. How do we prove that?
A certificate cannot show what a policy does not contain. The usual answer is a written confirmation from the insurer or your agent of which exclusions are not on the policy, plus a description of the work you actually do.
The client wants proof we'll be covered for six years after the project. What can we give them?
No professional liability policy promises coverage for years ahead, because policies renew annually. You meet that kind of requirement by keeping coverage continuous, providing certificates when asked, and buying tail coverage if you stop practicing.
Does adding a limitation of liability clause lower our premium?
It does not change what your policy covers. Some insurers offer a premium credit when the clause is used consistently, sometimes only below a set cap. If you start using one, tell your agent at renewal.
What's the difference between a certificate holder and an additional insured?
A certificate holder receives proof that you have coverage. An additional insured receives coverage under your policy, usually only for claims connected to your work, and only if the policy includes the right endorsement.
Policies, pricing and switching
We're moving from a low-limit policy to $1 million. What happens to our retro date?
Some insurers keep your old retro date only up to your old limits and start the higher limits on the new policy date. That is called a split retro date. Ask about it before you bind.
I'm not the architect of record on my projects. Am I still covered?
Many professional liability policies are written around the services you perform, not whether you seal the drawings. Some insurers require licensure. Describe your role accurately on your application.
My policy doesn't mention condos or interiors. Are they covered?
Policies rarely list project types. They define professional services broadly and then restrict coverage through exclusions, endorsements and sublimits. Check for a condo exclusion or sublimit, and expect your project mix to affect renewal pricing.
Our premium payment bounced. Do we have a lapse in coverage?
Usually not right away. Insurers typically send a notice of cancellation with a future date, and paying before that date generally keeps coverage continuous. Ask for written confirmation, such as a rescission notice.
General information, not legal advice or a statement of coverage. Whether a policy responds depends on its wording and the facts. Hardcover is an insurance agency, not a law firm.
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