With construction volume down and the cost of defending claims up, major insurers providing professional liability coverage to architects and engineers all plan to raise rates in 2011, according to a new market survey by Ames & Gough, the McLean, Va., insurance broker and risk consultant. The trend, based on responses from insurers representing 70% of the U.S. market for this coverage, is the first across-the-board increase in several years, says Dan Knise, president and CEO. He says about a third of providers lowered their rates in 2010. Knise points to new project management approaches—such as integrated project delivery and public-private partnerships—as well as the frequency of claims and rising legal costs as factors in the 2011 survey results. About 40% of insurers set to raise rates this year plan hikes of 6% to 10% or more. Insurance capacity remains stable, but “firms thinking about changing insurers should carefully weigh the value of continuity and stability against the near-term opportunity for a lower premium payment,” says Knise.
A/Es’ Liability Coverage Rates Will Rise in 2011, Says Survey
March 16, 2011