Design for the Unexpected: 5 Claim Scenarios for Design Firms to Avoid [Tool]
No matter how well you prepare for a project, mistakes – real and perceived – are always possible. A rushed decision, a handshake agreement or an unchecked assumption can leave your design firm exposed to a professional liability lawsuit and the financial and reputational harm that could result.
Architecture, engineering and other professional design firms are at risk of costly liability claims even when conducting routine business. This interactive experience uses five claim scenarios to help you understand how to avoid some of the risks that design firms like yours may face. Professional liability insurance can help protect your design firm from the potentially devastating costs of a liability claim against your business. Here’s how:
- Crisis event expense reimbursement coverage – Imagine your company experienced a public crisis and you needed to hire a public relations firm to manage communications and mitigate the damage to your firm’s reputation. Crisis event reimbursement coverage can help cover the costs. Covered crisis events can include things like the death or departure of a key employee, a workplace violence incident or other events that materially affect your company’s reputation.
- Disciplinary and regulatory proceeding expense reimbursement – If your design firm incurs expenses as a result of a disciplinary or regulatory proceeding against it, then disciplinary and regulatory proceeding expense reimbursement coverage can help cover those costs.
- Automatic acquisitions coverage – If a company that your firm acquired is accused of wrongdoing, automatic acquisitions coverage can help. It automatically provides coverage during the policy period for 90 days from the acquisition or until the expiration date, whichever is earlier.
- Pre-claim assistance – This coverage can help with costs related to the evaluation and mitigation of a potential claim. Pre-claim assistance can help you understand how to avoid situations and statements that could increase your risk.
- Joint venture coverage – For liability that comes with participating in joint ventures, this coverage can help protect your firm if you are held individually liable for the negligence of other members of the joint venture.
Protecting Your Design Firm From Professional Liability Claims
These are just a few of the provisions in your Travelers Professional Liability policy that are critical for protecting your business. Learn more about how to choose a professional liability insurance policy for your design firm. Consider coverage for risks that are unique to your design business, such as worldwide coverage and network and information security offense coverage.
It’s also important to take steps to help protect your design firm from professional liability claims. These include maintaining complete records of communication, creating strong contracts and protecting your data from bad actors.
Evaluating your design-build agreements are another important way to help protect your design business. For example, having separate agreements for the conceptual, negotiation and bid phase, and a professional services agreement for when the project moves forward, negotiated at the same time, can help manage risks throughout the project.
If your design firm is facing a claim, prepare yourself in advance by reading an overview of what’s involved in a typical professional liability claim. This can help you understand the types of damages you could face and lessons learned from litigation.
Learn more about our Design Professionals Liability products and services and how Travelers can help protect your business, or talk to your independent agent or broker.
More Prepare & Prevent
Knowing what to expect from a design professional liability claim can help your design firm through the process and help your design firm protect against potential claims.
Here are six coverage areas you’ll want to look for in your professional liability coverage.