Architects and Engineers Professional Liability Product Highlight

The marketplace for Architects and Engineers Professional Liability coverage (AE PL) has transformed greatly over the past 10 years, with more admitted carriers providing broader terms at lower rates.  Furthermore, the number of firms carrying AE PL coverage has steadily increased, as AE PL is commonly required by contract.  Eligible classes include the usual professional service providers such as architects, engineers, surveyors, landscape architects and interior designers.  However, most carriers can adequately cover professionals engaged in other professions such as agency construction management, environmental science, aerial surveying and building commissioning services.

AE PL coverage is intended to respond to third party claims against the insured alleging negligence in providing professional services.  The majority of carriers are able to expand the coverage to also respond to pollution conditions arising out of the insured’s professional activities.  Coverage is also available via endorsement for exposures such as cyber liability.

Claim activity remains stable overall, with structural, geotechnical, and construction staking surveyors responsible for a significant portion of claim activity and severity losses.  These classes have encountered higher rates as a result.  In addition, underwriters are paying close attention to project profile when calculating rates.  Examples of projects attracting underwriting scrutiny include condominiums, schools, tunnels, water/wastewater treatment plants and data centers. Fortunately, the relatively high number of market players means that design professionals are often able to negotiate favorable renewal terms. Those encountering difficult renewals have been increasingly turning to the E&S markets for more competitive offers.

Historically, many clients had taken advantage of aggressive pricing and broad appetite within the London markets. Due to recent market volatility in London, coupled with the expanded underwriting capacity and expertise in the United States, most design firms successfully secure coverage in the domestic US insurance markets.

RT’s National Environmental and Construction Professional Practice (RT ECP) has experience placing coverage for a wide variety of firms including geotechnical and structural engineers, process and engineering, procurement and construction (EPC) firms, environmental engineers, as well as project-specific professional liability policies for larger projects. Contact your RT ECP consultant today to find out how we might help on your next AE PL placement!