Short answer
When a claim letter arrives and no one knows what went wrong yet, you generally report a claim to both carriers that might respond. That usually means general liability and professional liability. Reporting late can put coverage at risk under the policy’s notice conditions. Reporting does not admit fault, and the carriers decide which policy applies after reviewing the facts. This is general information, so check your own policy wording.
Why a claim letter starts a clock
A notice letter often says a problem exists and an investigation is underway. It may not say who caused it. Many policies require prompt notice of claims, and some also require notice of potential claims.
The time limit usually comes from the policy’s reporting condition, so read that section first. Wording varies by carrier.
Why timing matters more for professional liability
Professional liability is usually written on a claims-made basis. Coverage generally depends on when the claim is made and when it is reported to the carrier. Reporting windows can be tight, and they often end with the policy period or an extended reporting period.
General liability is commonly written on an occurrence basis. Timing still matters, because notice conditions apply there too. The stakes around the policy period are usually higher on the professional liability side.
Why “I’m sure it’s not a design issue” is not a reason to skip a carrier
A firm may feel confident the problem came from construction, or from someone else’s design. The carriers have not reviewed the facts yet, and neither have you.
Early notice to every policy that might respond keeps your options open. A firm that waits for certainty may find the reporting window has closed. When you report a claim to both carriers, each one can review the notice against its own wording.
What happens after you report
Each carrier reviews the notice and the policy. A carrier may ask for documents or more detail about your role. In some cases, carriers may agree to share defense costs, depending on the policies and the facts.
Reporting is not the same as an accepted claim. A carrier may accept, reserve its rights or decline, and that decision rests with the carrier.
What to send when you report
Your broker or carrier can tell you exactly what they need. Common items include:
- The claim or notice letter you received
- The contracts for the project
- Project dates, including when your work started and ended
- A description of your role on the project
- The policies and claim reporting contacts for each carrier
What not to do before you talk to your carrier
Avoid responding to the claimant on the substance of the problem. Avoid stating who is at fault. Hold off on starting repairs until you have spoken with your carrier, since policy conditions may address voluntary payments or admissions.
Your contract may also require a response within a set time. Ask your attorney about that part, because it is a legal question.
Real-world example
A design-build firm in Florida received a construction defect notice. This is an anonymized example for illustration. The owner asked why the firm would send it to professional liability, since he was not the architect on the project.
The notice said the investigation was still underway. No one could say yet whether the issue came from design, construction or both. The firm’s broker advised them to report a claim to both carriers, so they sent both policies along with the claim reporting contacts. The firm then reported to both the general liability and professional liability carriers.
The firm did not need to settle the design-versus-construction question first. The carriers sort out which policy responds.
What to check
- Where each policy describes notice of claims and potential claims
- Whether the policy is claims-made or occurrence
- The policy period and any reporting deadline
- Who the claim reporting contact is for each carrier
- Whether your contract requires you to notify anyone else, such as an owner or a client
- Who in your firm is responsible for forwarding a claim letter right away
Hardcover insight
Claim letters often land on the desk of someone who does not handle insurance. The notice can sit for days while the firm tries to figure out what happened.
A simple internal rule helps. Anyone who receives a claim letter forwards it to one person the same day, and that person contacts the broker. Keeping your professional liability and general liability policies and their reporting contacts in one folder makes that step faster. A review under risk management can also put that process in writing.
Related questions
Will reporting raise my premium?
A reported matter can come up at renewal, and carriers may consider it. A claim denied for late notice can cost your firm far more than the report would have.
Do I report even if there is no lawsuit?
Yes, if the policy requires notice of claims or potential claims. Read the reporting condition, and ask your broker if the wording is unclear.
Who decides which policy pays?
The carriers decide, after reviewing the facts against each policy. Your role is to report a claim to both carriers promptly and provide what they ask for.
Is reporting a claim the same as admitting fault?
No. Reporting gives the carrier notice so it can review the matter. Fault is a separate question, and it is decided later.