A professional liability claim can hinder progress and in some cases completion of a construction project. If overlooked when designing your risk program at the beginning of a project, you can be held accountable for costly professional liability claims. Whenever you start a new project, it is important that your policy is designed specific to your services. Your policy should provide full coverage in the event of a loss or change in scope of the project.
Risk transfer
Contractual risk transfer places risk with the party who is in a position to better minimize the risk, for example the vendor providing the service. This allows the prime to isolate themselves from exposure should a loss occur, lessening the financial pressures. By tracking, verifying, and controlling the subs access to a job you can ensure the responsible parties bares the burden of that loss. For effective risk transfer, make sure your contract properly calls for the appropriate additional insured and require certificates of insurance and any necessary endorsement forms. Being listed as an additional insured on a third-party certificate can give you rights under their policy and prevent exposure to risk.
Early engagement in claims management
In the event of a claim, review your professional liability policy and engage your claims advocate. Some policies allow for rectification coverage when approved by the carrier. When claims are left unaddressed, they become a costly burden to your company. Early engagement can save you money on insurance premiums and ensure less damage to your overall loss history.
Partner with a broker who understands professional liability and can help you minimize potential risk. For more information on professional liability coverage, contact a Marsh McLennan Agency (MMA) advisor.
