As a design professional, finding the right insurance coverage can be daunting. The idea behind professional liability insurance seems simple enough. Yet you will quickly find that architect insurance rates can vary from provider to provider. To add to the confusion, just because a policy is more or less expensive doesn’t necessarily mean it is better or worse than another one.
It turns out that there are many factors that impact the insurance rates you are quoted, including the scope of the coverage, limit options, claims frequency and more. The right professional liability coverage is more than just the option at the right price. It’s important to consider some of the other factors that go into the rate you’re quoted. It may help you get better coverage at a better price.
5 Factors That Can Cause Architect Insurance Rates to Vary
If you were to request quotes for professional liability coverage from three different companies, you’d likely get three different rates. Like any product, the price for a policy often depends on who’s offering it. But looking beyond the premiums, you will likely find your quotes have other differences that influence the prices:
Scope of Coverage
An insurance policy’s scope of coverage deals with which perils that could lead to a loss are and aren’t covered under the policy. While you would think this would be the same for all policies of a certain type, such as professional liability, that’s not necessarily true. A cheap policy may be skimping on something important.
For example, one policy could cover you for projects you work on across the country or internationally, while another may be more limited geographically. Or you may be offered a policy that only covers part of your professional responsibilities, leaving out something important, like construction observations, and creating a coverage gap that puts you at risk.
Breadth of Coverage
Another factor to consider is the policy’s breadth of coverage, typically described as limited, standard or broad. While a limited or standard policy may provide some coverage for a particular peril and loss, you may find it’s not as much as you needed or hoped for.
Coverage under a limited policy may only apply if certain circumstances are met. If they aren’t, your loss may not be covered at all. A standard policy usually offers more reliable coverage, but it may come with fewer benefits. A broad policy may include additional benefits, such as pre-claim assistance, contract reviews, settlement options and partner benefits. Broad coverage tends to come with a higher rate, but may save money in the end with the benefits it provides.
A policy limit refers to the maximum amount of money an insurer will pay out under the terms of a policy. Policies often have a limit for a single covered loss as well as an aggregate limit that sets the maximum amount payable for all claims during a policy period. Some insurers also offer shared limits pooled between a group of insureds. If others in the group experience claims, a shared limit may be depleted before you’re able to access it.
Most policies offer a choice of per-claim and aggregate limits, with lower limits offering less coverage at a lower price and higher limits offer more coverage at a higher rate. Shared limits are also usually offered at a discount.
The risk you present to an insurer is another key factor in the rate you are quoted. If you have experienced a professional liability claim in the past, it can increase the rates you are offered because there is a higher risk that you may experience another claim. Insurers may view claims history differently, with some only requesting information about claims made in the last three to five years. Others may ask about claims over a longer period of time.
If you have had a claim, a potential insurer will request detailed information on the matter. While any claim can increase the rate you’re offered, the circumstances of the claim itself may also be weighed as a factor.
While your own individual risk and claims has the most impact on your insurance rate, what is happening in the broader insurance market can also be key. If an insurance company sees a higher frequency of claims in a particular segment of the market that impacts you, your quote may be higher.
Market factors can include almost anything related to the industry, from particular geographic areas that have increased claims, to a particular design specialty that recently produced claims for other insureds, or a particular time period when claims are more frequent. The way insurers interpret market factors can also result in different rates being offered to you.
Competitive Architect Insurance Rates from Lockton Affinity
In today’s world, the right insurance protection is an important safeguard for architects, engineers, contractors and other design professionals. Every day, professionals face the risk of a costly lawsuit if something goes wrong on a project. Of course, it’s also important to find coverage that you can afford, which can be tricky in a field like architecture.
The Lockton Affinity Architect and Engineer Insurance Program has been carefully developed to protect professionals just like you. We offer competitive architect insurance rates on insurance tailored to meet your needs.
With our Professional Liability protection, you’ll receive:
- A scope of coverage developed by industry experts that covers you for the professional duties you perform as a design professional.
- Broad coverage with benefits including pre-claim assistance, complimentary contract reviews, disabled partner replacement and a say on settlements.
- A choice of limits designed to protect architects, engineers and other design professionals from today’s industry risks at competitive rates.
- Extensive risk management resources to help you lower your overall risk of a complaint or claim and protect yourself and your career.
- Insurance coverage created by experts who know your industry and its risks, so that you have the right coverage at the right price.
Plus, Lockton Affinity’s commitment to best-in-class customer service means you can quickly request a quote, apply for coverage and get help answering your questions. Request your price indication today to find out what our coverage will look like for you.