By Mark Jackson, JCJ Insurance
As a Design Professional, you are trained and educated to solve problems. Whether it is a new and innovative design concept, the repurposing of an existing structure, or fixing a project after storm damage, you are uniquely qualified to solve problems.
What do you do when there is a problem with one of your projects? How do you handle a phone call from an Owner or Contractor to address a concern or problem on your project? Your first thought might be “How can I fix this or make it right and get the project back on track?” You may start to investigate the problem to come up with solutions.
Have you ever considered discussing the situation with your insurance broker or insurance company? The typical response is “No, why would I call them?” You think that this common problem isn’t a claim. You haven’t been sued by anyone (yet). Or maybe you are hesitant to contact the insurance company because you do not want your firm’s insurance cost to increase.
Did you know that many insurance companies offer free pre-claims assistance – a coverage that is paid for by the insurance company and does not trigger your deductible?
Pre-claims assistance is an included service that most Professional Liability insurance companies provide for Design Professionals. The overall goal of pre-claims assistance is to help Design Professionals reduce their professional liability risks by identifying and addressing potential issues before they lead to actual claims, lawsuits, and costly legal actions. By taking proactive measures, the insured professionals can enhance their practice, protect their reputation, and potentially reduce insurance costs in the long run. Experience has proven that early involvement by your insurance company has helped to reduce the overall cost of the problem.
Some examples of a pre-claim issue might be a fee dispute, a potential code issue, or simply that your client is asking for documentation on the project. Getting your insurance company involved early and triggering pre-claims assistance can provide:
- Early intervention: If a potential claim situation arises, pre-claims assistance allows the insured to promptly notify the insurance company. This enables the insurer to engage in early intervention, potentially resolving the issue before it escalates into a formal claim or lawsuit. By involving the pre-claims assistance team early on, Design Professionals can address issues promptly and proactively. This early intervention can help prevent claims from escalating or becoming more costly to resolve.
- Risk Mitigation: Pre-claims assistance helps Design Professionals mitigate risks associated with potential claims. It provides coverage for legal costs that are paid for by the insurance company and are not subject to the deductible. By getting your broker and insurance company involved early, we can reduce the overall risk exposure.
- Expert Guidance: Pre-claims assistance provides access to a network of experienced professionals, such as lawyers and claims consultants, who can offer expert guidance and advice. Design Professionals can consult with these professionals to assess potential claims, understand their legal position, and develop strategies to mitigate risks. This support can be invaluable in navigating complex legal and insurance matters.
- Reputation Protection: Firms rely on their reputation and client trust. In the event of a claim, pre-claims assistance can help Design Professionals protect their reputation by taking prompt action, conducting thorough investigations, and seeking early resolution. This proactive approach demonstrates a commitment to professionalism and client satisfaction.
- Cost Savings: Pre-claims assistance can save your firm significant costs in the long run. By addressing issues early, firms can potentially avoid expensive litigation, legal fees, and damages. Insurance coverage for pre-claims assistance can help absorb the costs associated with seeking professional advice and assistance.
- When you seek pre-claims assistance from your insurance company, it triggers coverage under the policy, thereby locking in the insurance policy limits in effect at the time the matter was reported.
Design Professionals deal with problems every day and it is important that your entire team knows to act quickly when they think there is a potential unresolved problem. Your firm’s leadership should be notified so that pre-claims assistance can be utilized promptly to hopefully avoid a claim altogether.
Please be aware that not all threatening circumstances would be considered a pre-claim. Sometimes facts or circumstances exist that would place a reasonable person on notice that a claim would likely arise. Most policies have Circumstance Reporting that allows you to report these matters. Should such matters then develop into actual claims, coverage would relate back to the policy under which the facts and circumstances were first provided. Some policies give the insured the option to report these matters, however, some policies make reporting mandatory. While relatively rare, some insurance companies will not allow the reporting of potential claims or circumstances.
As with all things insurance related, your insurance policy is unique. Because the terms and conditions regarding claims, pre-claims, and circumstances can differ with each insurance company, it is important to get your insurance broker involved early when an issue arises. Your insurance broker should be able to advise you on the best course of action to take with your insurance company. It is also important for your firm to consider working with an insurance broker that specializes in insurance for Architects and Engineers as they typically have a thorough understanding of the different policy forms and reporting requirements.
In summary, pre-claims assistance provides your firm with proactive support, risk mitigation, expert guidance, and potential cost savings. It can help you navigate the complexities of claims and legal issues, protecting your professional reputation and financial well-being.