Optimizing Professional Protective Indemnity Coverage
Source: https://www.irmi.com/, April 2, 2024
By: Jeff Slivka
Professional protective indemnity coverage is an effective financing mechanism for contractors and owners who are hiring design professionals or engineering firms. Both owners protective indemnity and contractors protective indemnity coverage insure against the risk of catastrophic damages caused by hired design professionals or engineering firms. 1
This added protection is becoming increasingly important as many architects, engineers, and design professionals secure lower professional liability insurance limits than necessary. For example, one of the largest engineering trade associations in the country—American Council of Engineering Companies (ACEC)—recently completed its 2022 annual insurance survey of its membership, which analyzes the cost and limits purchased by each of the participating firms. ACEC found that 70 percent of civil, 84 percent of geotechnical, and 74 percent of structural engineering firms purchased professional liability limits of $3 million or less. Likewise, 86 percent of all types of firms generating $49 million or less in fees/revenue purchased professional liability limits of $5 million or less. Read more.
