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Member, Beacon International Group, Ltd.
Most professional liability insurers for architects and engineers saw flat liability insurance rates last year, and they anticipate rates will remain flat in 2016, according to a survey issued Wednesday.
Eight of the 14 insurers surveyed during January and February reported flat rates in 2015, while nine indicated their plan for 2016 is to keep professional liability rates flat, according to the survey by McLean, Virginia-based specialty broker Ames & Gough.
Among the five insurers who plan to increase rates overall this year, three cited rate inadequacy unrelated to claims and losses, due primarily to several consecutive years of premium reductions, according to the survey.
“While most insurers had modest rate increases from 2012-2014, the overall industry rates still have not increased over the long term due to years of rate declines during the long soft market cycle that lasted through 2011,” says the survey.
“The good news for architectural and engineering firms is that the marketplace for professional liability insurance has seen competition both from existing insurers seeking to expand their business and insurance companies new to this coverage line that want to establish a foothold or gain market share,” Ames & Gough President and CEO Dan Knise said in a statement. “In the past, competition has been keen among insurers vying for the business of smaller design firms, which many underwriters see as more desirable risks. Yet, lately competition has spread to all segments of the market.”
The 14 insurers participating in the survey accounted for more than 75% of the overall market providing professional liability insurance to architects and engineers in the United States, according to the survey.
CNA Financial Corp. has enhanced its CNA Paramount package policy for midsize businesses with industry-specific general liability endorsements.