Professional Services Coverage
Arthur Hall Insurance provides coverage for professional firms that span many industries and come in a variety of organizational structures, from a single individual to interstate firms with hundreds of employees. Although some industries with a large number of professionals have very specific programs, many fall into a specialized professional category with specific forms tailored to specific types of work. Some examples of programs available include:
- Architects and Engineers
- Accountants and Bookkeeping
- Attorney/Law Firms
- Computer Consultants (System Integration, Design, Programming, Web Design, etc.)
- Technology Automation Consultants
- Construction Consultants – Roofing, Structural, Planning
- Environmental Consultants and Engineers
- Management Consultants
- Miscellaneous Consultants
Professional firms typically have the need for the following four types of coverage:
This provides protection for claims of bodily injury and property damage that you or your employees cause to others. Sometimes referred to as premises liability, it is a lower hazard exposure and therefore the least expensive. Small consulting firms working out of their homes often incorrectly assume that their homeowner insurance will deal with any premises liability exposures related to their business. The vast majority of homeowners’ insurance policies state in very clear language that “any claim arising out of a business pursuit is excluded.”
Individual consultants typically have a small amount of office equipment to perform their work. Larger firms, in addition to office equipment, might have a need for protection in case their office space becomes unusable for a period of time. Computer coverage and loss of data has become an imperative in a variety of industries. This coverage is often bundled together with the General Liability on a policy called a BOP (Business Owner’s Policy). Minimum premiums on this type of a policy start at $500 and go up depending on the amount of property covered, the type of building, and a variety of factors related to the location.
This provides protection for errors or omissions related to your professional work. Some people describe this as covering “other than bodily injury or property damage.” Many professions pick up coverage for libel, slander, and copyright infringement on this policy; such is the case with attorneys or advertising agencies. This is often the most expensive of the coverages purchased by consulting firms and they are most commonly written on a “claims-made” basis. Some premiums start as low as $1,000 and go up to several thousand dollars depending on the industry, limits, areas of practice, and number of professional staff in the firm.
Claims-Made vs. Occurrence-based coverage
The coverage is based on when the claim is reported. To trigger coverage the following must be in place:
- Claim is reported during the current policy period. The company providing the insurance coverage when the claim comes in is the company that is responsible for the claim.
- Incident must have occurred prior to the retroactive date (the time coverage was first put in place).
The coverage is triggered when the incident occurred. Thus, the company insuring the firm when the incident occurred will be responsible for the claim, regardless of when the claim is reported.
Also called Employer’s Liability. Every state has Workers’ Compensation laws that state that employees may not seek legal action against their employers for work-related injuries. However, in exchange for that exemption the employers must purchase a Workers’ Compensation policy to provide medical, disability, occupational rehabilitation, and death benefits to the employees in the event of a work-related injury. Sole proprietors, partners, and members of an LLC are by law not considered employees; however, officers and owners of Sub-S Corporations and C Corporations are considered employees and are required to have coverage or file an exemption with the state. Not all states allow for exemption, but Pennsylvania and Delaware do.