Professional Liability Insurance For Architects – Design professionals are often asked by their clients to sign contracts that include extensive—sometimes unreasonable—insurance requirements and indemnification provisions. They are usually designed with the goal of protecting owners, customers, contractors, or other project participants. But how does it work when the necessary coverages are not found in the commercial insurance market?
Certificates of Insurance (COIs)—also often requested in professional service contracts—provide summaries or verifications of current coverage, including policy effective dates, insurers, and certain policy limits. A certificate provides a snapshot to the requester (commonly referred to as the certificate holder) for informational purposes. It is important to understand that a certificate does not endorse, modify, replace or extend coverage in any way; Nor does it act as a contract. Certificates are often awarded using a set of industry standard forms developed by ACORD (formally known as the Association for Cooperative Operations Research and Development), which indicate:
Professional Liability Insurance For Architects
This certificate is issued as a matter of information only and does not confer any rights on the certificate holder. This certificate does not modify, extend or replace the coverage reported by the policies described below.
Northeast Ohio General Liability Insurance & Coverage
Issuers of COIs generally try to accurately reflect the applicable insurance policies, but those relying on the forms need to keep in mind that a hundred-page insurance policy can fit into one form. It is almost impossible to summarize, with some boxes issuing certificates of insurance often struggling as they try to confirm in a COI that specific and detailed contractual requirements are being met. are or are not being done.
A common challenge is meeting a request that an insurer provide notice of policy cancellation to the insurer’s customers. To do this, the insurer would need to track all such requirements for all insureds for each contractual requirement period – which may also be unspecified. With this in mind, ACORD made changes in 2010 to clarify that the insurer’s notification duties are defined in the insurance policy, not the professional services contract.
Generally, courts agree that a certificate of insurance is not a contract. A fundamental reason is that there is no consideration—or payment—to the issuer by the certificate holder. However, it is a duty to make a proper representation within the limits of the overall system. To consider this, we will review some recent cases interpreting the obligations for COIs and their issuers.
When certificates of insurance are issued, whose responsibility is it to consider all policy exclusions and contract definitions that directly affect the scope of services being performed? If we start with the premise that a COI is intended to fully confirm—but not change—coverage, is it sufficient to review the insurance sections of the contract before issuing it? Consider the findings of an Ohio court in January 2015.
Design Professional Liability On Completed Work
Architect NBBJ was contracted to provide design and construction phase services on a new 12-story cardiac patient tower for Miami Valley Hospital [MVH]. NBBJ to maintain commercial general liability (GL) insurance for the professional services contract, to add MVH as an additional insured to the extent of contractual liability assumed by NBBJ and to indemnify MVH, its officers, employees, and successors from and to NBBJ. Need to keep harmless against. Negligent acts or omissions.
In 2011, Legionella disease broke out in the tower. The leak was later traced to the plumbing system in the new tower. At least one died and ten others contracted the disease, leading to separate lawsuits filed against the hospital. MVH, its insurer, and the construction firms involved asked NBBJ to defend them, citing a contractual requirement to do so. NBBJ refused to provide a defense, so MVH sued, alleging that NBBJ not only failed to secure an insurance policy protecting against bodily injury claims caused by the spill but also failed to provide a defense. K also violated his contract.
NBBJ responded that they did, in fact, have a policy, and that MVH was included as an additional insured. However, that policy includes an exclusion for bodily injury caused by a biological agent or bacteria. Because Legionella is a bacteria, there was no coverage. In its motion for summary judgment, NBBJ justified its denial by noting that the contract contained the following:
Unless otherwise provided in this Agreement, the Architect and the Architect’s Consultants shall have no responsibility to persons for the detection, presence, management, removal or disposal of any hazardous materials or toxic substances on the Project Site.
Architect Insurance: Liability, Cost & Quotes From $5
The trial court noted that the contract never defined “hazardous material” or “toxic waste.” Relying on the dictionary definition, the court found that biological agents did not fit either term’s definition and therefore could not be excluded. NBBJ appealed. The appellate court noted that while NBBJ’s GL policy excluded “pollution” and “biological agents,” the contract with MVH allowed NBBJ to exclude pollution from its scope of services.
The appellate judge confirmed that NBBJ was not contractually permitted to purchase an insurance policy that excluded injuries resulting from biological agents and that the effects of said agents were within the scope of liability assumed by the architectural firm. .
In other words, even if NBBJ’s insurer(s) denied the claims, based on contractually assumed obligations, MVH could look to NBBJ to satisfy those claims.
This is an excerpt from the April 2016 issue of ProNetwork News, Endorsements, Certificates of Insurance, and Other Tools for Proving Coverage: Why You Can’t Always Have It Your Way. To continue reading the explanation and conclusion of the other original case, you can download the full PDF version of the newsletter on our website for free.
A Complete Guide To Architect Professional Liability Insurance
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What Is Professional Liability Insurance?
You can get a no-cost, no-obligation quote for professional liability insurance today by downloading our application and emailing it to your local a/e ProNet broker. The decision to purchase professional liability insurance for an architectural firm, or even a freelancer or independent. Contractors are not necessarily easy to make in the beginning. When an architect is faced with that decision, it is probably an indicator that some important event has occurred, such as winning a large contract or an unexpected expansion, that an insurance policy can provide additional protection. can guarantee While professional liability may seem like an unnecessary expense to some architects, it is truly one that can provide countless benefits. Consider the following 6 reasons why professional liability insurance is important for architects.
The main purpose of professional liability insurance is to protect the policyholder against any potential mistakes that may occur on the job. In a design field such as architecture, it is not uncommon for even the most skilled worker to measure wrong dimensions incorrectly or simply note them incorrectly. A simple calculation or delineation mistake can result in mistakes that cost thousands of dollars to correct. Without a professional liability insurance policy, the firm will be responsible for paying the company out of pocket to correct those mistakes. The same situation is true for an architect who is working on an independent contractor basis.
Most insurance companies offer CGL coverage for businesses that need an insurance policy. However, CGL insurance covers the policyholder against accidents that occur on property or damage to property that may occur to any business, regardless of the operations there. CGL insurance is not meant to cover incidents that are strictly related to work done in the design field such as architecture. Most CGL policies strictly exclude personal liability claims, so they are not sufficient for the needs of an architectural office while professional liability policies are specialized and varied in their coverage.
Many small architectural firms choose to go without professional liability insurance as a cost-saving measure, and this choice backfires on them. It may seem like an easy decision to opt-out of purchasing an insurance policy for a small job that seems low-risk. However, if something goes wrong, the cost of repairing the damage far exceeds the annual insurance premium. Architects who wisely cover themselves with professional liability insurance give themselves peace of mind knowing that they are covered regardless of the size of an issue. Professional liability insurance will cover any court costs involved in litigation as well as any settlement costs. A firm that would have to cover these costs itself could easily go bankrupt as a result.
Types Of Insurance
Management services for their clients. A representative of the insurance company will review standards and practices with the firm. The insurance company will also go to the contract provided by the customer to find and continue any loopholes