The new structure provides a dedicated limit for every project a firm works on after the retroactive date specified in the professional liability policy—even if the policy aggregate limit is exhausted after a claim.
PRODUCT: Per-project primary limit coverage on architects & engineers professional liability
COMPANY: Berkley Design Professional, a division of Berkley Alliance Managers
BEST RATING: A+ (Superior)
AVAILABILITY: Coverage is available through retail brokers that specialize in working with design firms.
FOCUS: Berkley Design Professional, which specializes in professional liability products and services for the design professional industry, now offers the per-project primary limit coverage as a professional liability coverage option.
The new structure provides a dedicated limit for every project a firm works on after the retroactive date specified in the professional liability policy—even if the policy aggregate limit is exhausted after a claim. It also ensures that the per-project primary limit is available to cover all other projects during the policy.
“It changes the way design firms should think about and purchase professional liability insurance,” says Lawrence Moonan, executive vice president and chief operating officer of Berkley Design Professional. “The per-project primary limit insulates the total available limits of liability as long as the per-project primary limit is not exceeded.”
Consider a design firm with a professional liability insurance policy that has limits of $2 million per claim and $2 million aggregate liability, plus a$500,000 per-project primary limit. The firm has a $350,000 claim during the policy period. “As the claim did not pierce the $500,000 per-project primary limit, it still has the entire $2 million [aggregate] limits of liability available to apply to other claims,” Moonan explains.
But what if the firm has another claim totaling $2 million. “Since this claim does pierce the per-project primary limit of $500,000, then the entire $2 million [aggregate] limits of liability would be exhausted,” Moonan says. “However, the firm would still have its $500,000 per-project primary limit available for every other project since the retroactive date for the remainder of the policy period.”
Moonan says this is radically different from the “traditional” approach to limits of liability—and constitutes a method Berkley Design Professional believes may be a better way to offer peace of mind to clients.
UNDERWRITING: Per project primary limit options are available at $100,000, $250,000 and $500,000. The offering of this coverage is subject to underwriter review and approval. Coverage is competitive with traditional split-limit of liability options (i.e. $1 million/$2 million).
Berkley Design Professional has been in business since 2013, but its senior management team is composed of individuals that average almost 20 years in the A&E professional liability niche. It is a member of W. R. Berkley Corporation.
DISCLAIMER: Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issues.
MINIMUM PREMIUM: N/A.
TARGET: A&E firms with annual revenues up to $15 million, “which represents more than 95%, by number, of the design professional firms in the U.S.,” Moonan points out.
COVERAGE TERRITORY: All 50 U.S. states.
CONTACT: Lawrence Moonan, executive vice president and COO; Berkley Design Professional, Dolores, 1NE of 5th Carmel, CA 93921; 831-250-7082.
Ronimarie Acord is an IA contributor..
