How to save money on professional liability costs

Insurance is probably one of a design firm’s biggest expenses, and behind health insurance costs, premiums paid for errors & omissions (E&O) coverage for architects and engineers is at the top.  Here are some suggestions for saving money on professional liability coverage for design firms:

  1. Compare quotes: Let Maloney & Company, LLC shop around and obtain quotes from different insurance providers. We work with dozens of specialized programs, way more than most insurance brokers, and this approach will allow you to compare the cost and coverage of each policy and choose the one that best fits your needs and budget.
  2. Increase your deductible: Increasing your deductible, or the amount you pay out of pocket before insurance coverage kicks in, can lower your premiums. Insurers offer different options like first dollar defense coverage (aka Dollar One Defense), aggregate deductibles and maintenance deductibles.  Reviewing these various offers with our experienced account managers can save you significant money!
  3. Risk management: Implementing risk management practices can help lower the likelihood of a claim, which can in turn reduce your insurance premiums. This can include things like implementing policies and procedures to minimize errors and omissions, providing staff training on best practices, and using contracts that allocate risk appropriately. Ah, this is where Maloney & Company, LLC shines! For over 20 years we have been helping design firms with practice management.  Everything from our webinar series (six presentations in 2023 alone!), to the Contract Review Guide written and updated annually by Mike Maloney to the individual attention you will receive when you have a troubling situation arise, we can help you be a safer firm.  And a safer firm pays less in deductibles…
  4. Bundling coverage: If you need more than one type of insurance coverage (such as both professional liability and general liability), bundling your coverage with one provider can often lead to discounts.  We work with several programs that offer special design endorsements for architects and engineers, and most of these programs offer multi-line discounts.
  5. Consider having the project owner retain design consultants directly:  If you don’t have to show subconsultant fees on your application for professional liability, it will reduce your ratable billings and lower your premium.  Plus, in the event of a claim, your attorney will be able to suggest that you did not have responsibility for the subconsultant’s work.
  6. Don’t be penny-wise and pound foolish: The time when you need broad insurance coverage the most is when there is an issue on a job.  If you have chosen your coverage solely based on the lowest cost, you may find yourself vulnerable.  Choose an experienced insurance representative that understands what you do for a living and can knowledgeably explain how your coverage would apply to your firm.