Understanding A Design Professionals Insurance Policy
A business owner's policy is actually two types of coverage in one
. The first part of the policy is the property coverage. Typically the property portion of the policy protects business personal property such as tables, chairs, fax machines, computers, software, plotters, and printers. This is written on a replacement cost basis.The second part of the bop is called general liability or GL. Many firms refer to it as "slip and fall insurance" but it is much more than that. It provides coverage for bodily injury and property damage at the office or away from the premises such as at a job site. Also included under the GL is a medical, product and completed operations, personal and advertising injury. Non-owned and hired auto liability coverage can also be provided for rented or borrowed autos and excess coverage over employee's personal auto coverage while using their personal car for business purposes.
There are many coverage's provided under the business owners policy designed for the A/E insured. Here are just a few.
Valuable papers coverage: Usually the limit is around $100,000 but can be increased. This coverage protects the value of the insured's time. This covers the cost to re-create architectural and engineering drawings, sketches, specs & blueprints if they are destroyed or damaged by a covered loss. Most of the time earthquake and flood are covered perils.
Fine arts-why fine arts?: The description of fine arts has been changed on some A/E policies to include architectural models. This coverage is provided anywhere in the covered territory. A stated value must be provided. Coverage starts at $25,000 with no additional cost but can be increased.
Contractor's equipment: Engineers and surveyors have lots of equipment. With the cost of GPS equipment and surveying equipment it is important to have these items scheduled on your business owner's policy. Some carriers provide replacement cost coverage regardless of age. Coverage also includes data that is stored on the equipment. Carriers also provide coverage for property of others in the insured's care, custody and control. Some insurance company's provide coverage for waterborne equipment starting at $10,000 and can be increased.
Computer coverage: This provides coverage for your computers and media. Coverage can be provided for in transit, electronic vandalism, and interruption of computer operations (business income). Also physical loss to data and media occurring on premises and off premises can be provided. Laptop coverage is worldwide.
Because A/E firms enter into many contracts asking for specific coverage wording, the A/E business owner's policy has included this wording and coverage's in their policies under the general liability and by special endorsements. Here are a few of the most requested ones.
Blanket additional insured-coverage is provided to another person or organization when agreed to under a written contract or agreement adding them as additional insured for liability coverage but only with respect to liability for bodily injury, property damage, or personal injury cause in whole or part by named insured acts or omission or acts or omission of those acting on your behalf.
Primary and non-contributory-if agreed to in a written contract or agreement that the architects/engineers insurance will be primary and non-contributory with the insurance of the additional insured. The A/E policy is primary, and the insurance company will not seek contribution from the others carrier.
Waiver of subrogation-this provides that the insurance carrier will waive the rights of recovery against a person or organization if the architect or engineer has waived the rights of recovery in a contract or agreement prior to the injury or damage.
Per project aggregate-a per policy aggregate is the most the insurer will pay for the total of all claims during the policy period, normally $2,000,000. A per project aggregate means the insurer will pay the same $2,000,000 for all claims that occur from any specific project. It greatly increases the amount the carrier could potentially pay during the policy term.
All A/E carriers are different and some do not provide all of the coverage's mentioned. That is why it is important to talk with the insured and find the best company and coverage's to suit the A/E Firms needs.
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