insurance fun

[SLTA]

Hi folks,

It's time to renew my firm's liability/e&o insurance and I'm getting rather frustrated. The company I've been with has now taken over 6 weeks just to get a quote to me. ASCE came back with a quote the same day. Do any of you structural folks have insurance through ASCE? Have you found the prices comparable to other quotes? How's the service? Or any other thoughts I should know in this process?

I'm a one-person small firm doing non-high-liability work, FYI.

cheers.

 

[dig1]

Previously I uses the company offered through ASME (most highest exposure work was pressure vessel and tank design)and found they were expensive after a few years, plus they would only offer $1MM limits and my clients were starting to ask for $2MM limits. Long story shorter, I found that initially ASME offered a competitive rate but over time it was not as good (when I switched away from ASME to get the $2MM limits my premium was less than the ASME rate for higher limits and better coverage).

As a side note, I renewed a few months ago and my then insurance company (the one after ASME) doubled the premium for no good reason (no claims, very similar billings, no change in work type or % distribution of work); all I got is they were raising premiums. I shopped and found better coverage a few days later with a good company (my original agent offered to review differences in policy so I took him up on it; I have other insurance through that company as well) for the same premium as the previous year with prior acts included. My agent did a great job with my new agent in answering all the questions.

Patrick

 

[Ron]

slta....good luck! I have not had the same response from ASCE; however, that was quite some time ago. I have been with the same carrier for about 4 or 5 years now...no significant increase in premiums and my agent is responsive. Hopefully I'll never need the insurance, but....

Before this I had XL Professional. Great company, good coverage...premiums kept climbing. Had to get limits raised for one client (I'll never do that again!) and my premiums doubled! Went to present carrier, got reasonable rate, low deductible and good limits.

Bottom line...shop around. I'll email you the name of my carrier and agent.

 

[SLTA]

cheers, Ron! Thanks!

 

[SteelPE]

I'm new to the insurance gig. I sent my renewal package on June 10th and I have yet to hear back from the company on what my new premiums are going to be. All of this used to be handled by my old business partner who passed away a few years ago. Now I am trying to do this stuff myself.

Ron, when you switched companies did you need to purchase some sort of tail policy to cover you against previous projects or did you just wrap that into your new insurance?

 

[SLTA]

I ended up getting a good deal through my local folks, even though they took FOREVER to get back to me. SteelPE, call your folks and sweetly pester them until you get a quote.

 

[SteelPE]

slta,

to tell you the truth.... I haven't really given it much thought until now. My policy doesn't lapse until Sept 20th. Maybe they are delaying the process because they don't want to give me time to find other options.

 

[Ron]

SteelPE....new company just picked up where old left off. There was no lapse in coverage

 

[SteelPE]

Ron,

What type of insurance do you have? I assume it is a Claims Made policy? I thought the policy would only cover you against a claim that was made while the policy was still open.

For example, you are a consulting engineer insured by Company A from 2005-2011. You then switch to insurance Company B from 2012-present, due to better premium/coverage they offer you. You then have a claim made against a project you did in 2010. I thought that unless you purchased a tail policy from Company A or some sort of rider from Company B you would not be covered against the claim.

I guess I just don't really get insurance.

 

[Ron]

SteelPE...no, you are correct. Tail coverage is rarely needed unless you only did a few, larger projects with multiple parties. That is not my business mix, so didn't go with tail coverage.

Insurance is a big game and they know how to play it well. Coverage issues come into play in almost all the forensic work I do (not against me...just the ones who are the cause of or contributors to the failures). Professional liability coverage is usually not a big issue; however, it is often a declining balance coverage...meaning that the attorney fees for defense come from the policy limits. I had one case a few years ago where the consulting engineer made significant errors and they were relatively obvious. Damage was about $5M. The policy limits were $1M per occurrence and $1M aggregate. After all was said and done, the plaintiffs got about $500k...the defense attorney ate up the rest. They got $0.10 to fix $1.00 in damage. There were other reasons for the low settlement...mostly that there was no one left to sue except the engineer. Contractor and developer were long gone.

 

[zdas04]

When I was researching this my agent said, "Think about car insurance. You have a fender bender in July and don't bother to turn in a claim. In August you change carriers. You turn the damage into the new carrier in September. They ask for the police report. The new company denies coverage because you weren't covered by them in July. You turn the damage into your old company after that and they don't even respond to your letter, you don't have a current policy with them". I don't know why, but that seemed sensible to me. Applying the same logic to Professional Liability insurance works logically, but you pay so much more money for PL insurance than you do for car insurance that it doesn't feel right.

dig1,
I looked into the "prior acts" coverage and it more than doubled the point-forward premium. A bridge policy was only 70% of the new point-forward policy. Either way, the change was much more expensive than paying the new premium when the jerks raised it for no apparent reason.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

 

[SteelPE]

Well, I feel a little better a the fact that I have some sort of understand with what is going on.

While my business partner handled the insurance, we were part of a larger company that we offered consulting services to who paid for our PL policy as part of our agreement with them. My partner passed away in October of 2011 and in January of 2012 the larger company went out of business. I had to sort through this mess myself and I fought tooth and nail to get the tail coverage out of the larger company (in this case it was 250% of the yearly premium for a 5 year tail). I used every ounce of leverage I could find and after many tense months and discussions I prevailed on the other side. They were not happy but in the end there was nothing they could do because I had leverage. I still hold the original policy so there has been no need for a tail to this point.

What I don't really get is that the PL company can randomly decide to raise their rates and there is virtually nothing I can do on this end. I either purchase some sort of tail as some large $ or eat the premiums. Seems sort of unfair..... but I guess life is pretty unfair.

We were under 3 year contract when the company went under (with the same carrier since 2005). Since the policy was in the name of a company I owned I just continued on with the same policy. The contract ends in September and this is the first time that I am up for renewal since the mess happened. I am hoping the #'s come back similar to what they were previously.

 

[Compositepro]

"After all was said and done, the plaintiffs got about $500k...the defense attorney ate up the rest."

And probably the plaintiff's attorney got most of this $500k. So only the lawyers benefited from the insurance. If there had not been insurance there would not have been a lawsuit. But most would say this show the need for all to carry 5 or 10 million in insurance.

 

[SteelPE]

Finally got my proposal back from my agent. There was a 3% cost increase over what we were proposed 3 year ago. Not bad, but the premium has always knocked my socks off. I have them looking into what an increase in the deductible would do for me.... although I don't think it would be much.