Engineering Inc. - January/February 2010 - 25

Al Rabasca, director of industry relations for XL Design Professional, says, “If the price is really low, the firm should take a closer look at what they are getting.” Developing and maintaining high-quality loss prevention and risk management programs costs more, says Corbett. And while some of the newer carriers have attracted underwriters and claims managers from more experienced insurers, he says, “not every new carrier equally is qualified and capable” to practice in this specialized market. Eight of the 15 carriers responding to the survey provide professional liability coverage brokered by Marsh to Member Firms through the ACEC Business Insurance Trust (BIT). Jeff Connelly, vice president with Marsh, says his team “is frequently approached by new carriers interested in participating in the BIT’s program.” Davis says a carrier’s financial stability is “exceptionally important” and urges design firms—by themselves, or with the help of a capable industry consultant—to look beyond the ratings to carriers’ balance sheets in an effort to determine their relative financial strength and risk management strategies. Beazley’s Hughes urges firms to obtain a “loss run” from their carrier, or a report of claims paid out. Similar to applying for credit, she says, it is a good idea to know your history. A firm without claims or losses in the past five years is viewed as favorable, and “more carriers are going to want” such firms, Hughes says. Those with a more modest track record will have a tougher time negotiating policy terms and conditions. Be prepared to explain any claims, as well as any corrective actions taken, she says. “An underwriter doesn’t want to hear, ‘It wasn’t our fault.’ There’s always something you can learn.” Connelly agrees, noting his team “has had success negotiating rate reductions based upon Member Firms’ specific loss experience.” Further, he says, “at least one of the BIT Program’s carriers is adjusting its rating methodology to take into account the firm’s most recent 12-month period’s billings, rather than historical averages.” Schinnerer’s Porterfield calls design professionals “the most honest, dedicated group of people I have ever worked with.” His advice: Consider all aspects of a project. “Look at what you are doing as a business, and try to evaluate client selection and projects on that basis.” A spreadsheet of the 2009 survey results is available on the Risk Management webpage of the ACEC website at www. acec.org. n Maureen Conley is a business writer based outside of Washington, D.C. Resources that matter Your practice is at risk every day. Your reputation is always on the line. That’s why you need a professional liability risk management program specifically designed for A/Es and customized to protect your practice. With XL Insurance as your partner, you benefit from unparalleled resources that help you make good decisions and improve your firm’s risk management practices: – Expert claims handling by professional liability specialists who go to work for you from pre-claims situations through ultimate resolution. – Specialty underwriting. We gain a thorough understanding of your firm so that we can deliver customized insurance solutions. – Industry leading education backed by 30 years of front-line claims experience and resources like The XL Insurance Contract Guide for Design Professionals. – Specialized agents who deliver training, contract reviews, and XL Insurance’s loss prevention and education programs. We understand the intricacies of protecting your practice, assets and reputation. You can be confident in our knowledge. For free risk management tools, visit www.xldp.com/tools. For an agent near you, phone 800-227-8533, ext. 2102508. “XL Insurance” is a registered trademark of XL Capital Ltd. XL Insurance is the global brand used by member insurers of the XL Capital Ltd group of companies. Coverages are underwritten by Greenwich Insurance Company, Indian Harbor Insurance Company, XL Specialty Insurance Company, and XL Insurance Company Limited – Canadian Branch. Coverages not available in all jurisdictions. JANUARY / FEBRUARY 2010 ENGINEERING INC.

http://www.acec.org http://www.acec.org http://www.xldp.com/tools http://www.xldp.com/tools

Engineering Inc. - January/February 2010

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