My small firm (2 people) carries e & o insurance of $500k per claim and $500k annual aggregate, with a $1,000 deductible per claim. This is less than we used to carry ($100k agg) but becasue the price of insurance in my area has doubled in the last year, had to scale back.
This level of coverage costs my small firm $4,300 a year, OUCH. (Have had no claims ever, by the way).
Some days I think I should just open a 7 eleven somewhere, ha ha.
Do you both do work for Public Owners, where E/O coverage is required? Since you haven't had any claims, what about being "self insured" or limiting your liablity to the amount of your fee - two alternatives I hear about in this part of the country?
I do public work, but always through an Architect. He is the one required to carry the 5 mill insurance.
All the same, one doesn't want to get wiped out if something should go wrong.
The current insurance level for my practice is £1M professional indemnity and £2M public liability. I had to fight real hard with the broker in order to get the premium down to £2500.
We have never had a claim and we are always wary that we are being ripped off by the insurance companies. My broker told me that engineers were a bigger liability than architects, a fact that I find hard to believe. Renewal is in May and I am gearing up for another battle this year.
This is a subject that is dear to my heart. I would keep it to the minimum unless your clients has requirement. If you can limit your liability, contractually, to your fees that would be great.
The more coverage you have, the more trial attorneys would seek (LOL).
Seriously, I would not be caught without coverage. Your premiums are based on many factors (practice type, clientele, gross annual billing, etc.).
I'm a sole practioner (spelling was never my strong point). I have been in "business approximately 2-1/2 years. I averaged for the last 2 years approximately 150 projects per year.
My E&O insurance is $1,000,000. My premium is about $4,000 per year with DPIC.
If your annual billings are $ 150k and you have one million in coverage, I think you have too much coverage and open your self to suites.
The premiums i ah hearing $4000 for i million sounds reasonable. However, the $8800 for one million, it sounds out of line. Check with DPIC or ASCE. They should lower it for you.
I tell you, my feeling is to carry $500k unless a client wants more coverage; if they do, they need to bring their checkbook with them.
Keep in mind that structural engineers are the most expensive to buy coverage for obvious reasons.
We found out that most carriers will give you retroactive coverage to first day of coverage. I do not think they will go to the first day of business especially if you did not acquire insurance at that date and time.
I'm a sole practitioner doing structural (mainly residential) and geotech (again mainly residential).
PI cover is for A$2M, excess is A$25,000 for geotech and footing design and A$5,000 for structural. The premium is A$7,900. I have been in business for approximately 2 years and no claims made. Business income is A$110,000.
My insurer has notified me that the premium will increase by a minimum of 25% and possibly as high as 50%. Looks like I may end either charging my clients too much (and hoping like hell I can keep them) or going out of business.
Don't know why I am insured as the average cost of the components I design is less than the excesses. Pity there is only the one insurer who will handle geotech for residential and the required government registration.
I have asked the insurer what I can do to reduce my premium. The answer is don't do geotech or residential related work. (goodbye business).
