Should my architecture/engineering firm switch insurance companies on our professional liability renewal when we have an open claim?
It is typically advised that you stay with the same insurance company when your firm has an open claim. Generally speaking, it is best to stay with the same insurance company even when your firm doesn’t have a claim. When your firm does have a claim, if a secondary claim were to come up from the same claimant, then the same insurance company can also handle that claim and have the history of the claim. It would ease matters to stay with the same insurance company for the renewal.
It is not required that your firm stays with the same insurance company with a current open claim. If your firm does switch insurance companies, verify that the new insurance company is offering prior acts coverage. There may be an exclusion for any previously reported claims or circumstances if your firm were to switch insurance companies. Additionally, your firm will want to make sure that the prior claim information is shared with the new insurance company, even though it was reported to the prior insurance company. They will want to know the current status of the claim, the reserves, current expenses paid out, the expected close of claim and lessons learned from the claim.
Insurance companies may not offer a quote if the current open claim is either a large amount of reserve or is expected to have a long time period before it is closed or settled.
Keep in mind, it is always better if your firm can stay with the same insurance company, with an open claim or without a claim at all. If your firm has any questions with regards to open claims during a professional liability renewal, please call, or email, your Professional Underwriter agent for assistance.