Risk management is an essential part of your business operations. Here are five quick tips on how you can strengthen your architecture/engineering (A/E) firm’s risk management today.
Understand the implications of a Claims Made and Reported policy form. There is a high probability that your errors and omissions (E&O) policy is written on a Claims Made and Reported policy form. Other coverages such as your Cyber Liability, Management Liability, Pollution Liability, and Crime policies may also be written on this form. Claims Made and Reported policies require that claims and circumstances be reported during the policy period in which they first become known. This is imperative to understand, especially for situations where a claim happens right before your renewal date. It is not uncommon for a claim or circumstance to happen in the last week of your policy term. When this occurs, immediate action is required to ensure you are in compliance with the conditions of your policy.
Know when your policies expire. All potential claims & circumstances should be given immediate action; however, those that show up towards the end of your policy term require an added level of urgency to ensure they are reported before your policy expires. As mentioned above, this step is crucial.
Understand what constitutes as Knowledge. Claims Made and Reported policies typically exclude coverage for claims that you have knowledge of, prior to the effective date of the policy. Knowledge is seldom defined in the policy yet is often a key factor in your insurance company’s decision in whether to cover a claim. Evidence of knowledge prior to the effective date of your policy, such as an email stating there is a problem with a project your firm participated in, may result in denial of your claim if it is not reported within the conditions of the policy.
Establish E&O protocols. Once a team member has knowledge of a circumstance, what do they do with that knowledge? Do you have procedures in place that are following your E&O policy’s conditions? A good protocol should lay out who to report the claim to internally, the channel by which it is communicated, and emphasize the urgency in these actions. Work with your Broker to determine a protocol that follows your policy’s terms and conditions.
Enable Multi-Factor Authentication. Cybercrime poses an increasing threat to firms of all sizes. Multi-Factor Authentication is the easiest thing you can do to add extra protection against cyber criminals. Enable this process today and avoid being the victim of costly social engineering scams.
As an accredited AIA CE provider, Hall & Company hosts free webinars every six weeks on various risk management topics relevant to the A/E Industry. Click here to sign up for announcements on upcoming webinars.
About the Author: Licensed in Property & Casualty Insurance since 2009, Laura has been serving as a specialist insurance broker for A/E firms at Hall & Company since 2012. As a Certified Insurance Counselor designation, she is committed to professional excellence and serving her clients. Laura is also the Cyber Product Leader and head of Hall & Company’s A/E Resource Webinar Series.
Hall & Company is a sponsor and exhibitor at A/E/C THRIVE 2019: The Growth, Profit, and Success Summit for A/E/C Firm Leaders taking
place October 2-4, 2019, in New Orleans, LA.
This unique conference is an opportunity to hear directly from the leaders of top-performing firms and other industry visionaries on specific growth, profit, and performance improvement practices and how to replicate them.