Professional liability rates for architects, engineers to rise: SurveyPosted On: Mar. 5, 2012 12:00 AM CST
Most of the major insurers that provide architects and engineers professional liability insurance expect to raise rates this year, continuing a trend that began last year, according to a broker survey.
According to a survey by McLean, Va.-based Ames & Gough of 10 leading insurers in this market, 70% expect to raise professional liability rates during 2012 for architects and engineers, 20% expect rates to remain flat, and 10% expect them to decrease.
After the large number of natural disasters last year, in addition to the impact on property catastrophe exposures and related lines, insurers are “maintaining a closer watch over their long-tail exposures, including those related to their professional liability insurance portfolio,” said the survey.
Last year, 60% of the insurers surveyed increased rates, while 20% generally saw rates remain flat and 20% saw their rates decrease according to the survey.
Among those that plan to raise rates this year, 29% expect to seek increases of 6% to 10%; 57% plan increases of 3% to 5% and 14% expect to seek increases from zero to 2%.
Meanwhile, “significant capacity remains available to address the coverage needs of even the largest design firms,” according to the survey.
Commenting on the survey, Ames & Gough President and CEO Dan Knise said in a statement, “While premiums generally are not going up dramatically, they're not decreasing much either. Even so, there are still some limited opportunities for premium savings driven by an improvement in a firm's loss ratio or competition from one of the new insurers trying to grow its market share.”
Copies of the survey, “PLI Market 2012: Continued Smooth Sailing—Capacity Stable as Rates Begin to Firm,” are available by emailing email@example.com.
In November, two market reports from Kansas City, Mo.-based Lockton Cos. L.L.C. indicated insurance rates for construction contractors, architects and engineers could be on the rise.