The Driving Forces Behind Rate Change

Posted by & filed under BDP Blog.

June 9, 2022

If you upgrade your Ford Focus to a Mustang before your next auto insurance renewal, would you expect to pay more? After all, you still only have one car. I don’t think anyone would be surprised to pay more in this situation. So why then do design firms and contractors get surprised by a premium increase when their annual fees/revenues remain the same, but they are performing work in different disciplines or doing different kinds of projects than last year?

The year over year exposure change is more than just a change in the rating basis. It’s the change in the firm’s entire risk profile. As a dramatic example, suppose a firm does $10 million of civil engineering work one year, but the next year that same firm does $10 million of structural engineering work. The firm will pay more in year two simply because they are engaging in a discipline with more risk.

This is the basic underlying concept of what actuaries mean by exposure-adjusted rate change. If the premium charged in the second year only reflected the move from civil work to structural work, the exposure-adjusted rate change would be zero. We fundamentally need to charge additional premium for the type of work that is more likely to give rise to more severe claims simply due to the nature of the work.

Read more »

Wherever Your Next Adventure Takes You, Have Peace of Mind with a Run-Off Policy

Posted by & filed under BDP Blog.

By Barbara Block
Assistant Vice President, Senior Underwriter

May 5, 2022

You’ve worked hard for many years. Started your own business. Weren’t sure if you would make it, but you did. And, you fulfilled your dream of being the owner of a design professional firm. Congratulations!

Now the beach – or mountains or lake – summon you. It’s time to relax and enjoy the fruits of your labor with family and friends. Put all the pressure and stress of owning a business behind you. You’ve earned it and deserve it. But there is one more thing that you have to take care of to protect your future – purchase a run-off policy from Berkley Design Professional.

We know, another insurance policy? I thought I was done with that process, you say. Unfortunately, not. You see, even though your firm has closed its doors, you could still be liable for claims alleging wrongful acts for the services provided prior to the closure.

To protect yourself, you should purchase a form of tail coverage. Tail coverage covers incidents (claims) that happened during the time your professional liability policy was active, but were not reported until after the policy expired.

Read more »

Complimentary Webinar: Managing Risk through Effective Contracts

Posted by & filed under Events.

Presented by:
Diane P. Mika, VP, Director of Risk Management Education, Berkley Design Professional
Andrew D. Mendelson, FAIA, Senior Vice President, Chief Risk Management Officer, Berkley Design Professional

Thursday, June, 2, 2022
10:00 a.m. Pacific Time/1:00 p.m. Eastern Time
1.5 AIA Learning Units
1.5 RCEP Professional Development Hours

Berkley DP policyholders who participate in this program can qualify for a 15% Risk Management Education credit. Contact your agent for further information*

Your professional services agreement is an essential tool in managing your exposure to risk. An equitable contract fairly apportions risk, while an onerous contract can shift inordinate—and sometimes uninsurable—liability to you. The terms and conditions of the agreement establish the roles and responsibilities of the design professional and the client. The contract review and negotiation process provide you with an opportunity to set reasonable expectations with your client. And, in the event of a claim or dispute, your contract is the first piece of documentation the claims examiner will request.

Read more »

Core Values are Key

Posted by & filed under BDP Blog.

By Robert J. Connor, JD, CIC
Senior Vice President, Chief Marketing Officer, Berkley Alliance Managers, a Berkley Company

April 7, 2022

As we get ready to celebrate Earth Day on April 22 and think about making our world a happier, healthier place to live, it makes me think about our corporate environments. What makes them a happier, healthier place to work?

Discovering, communicating and living your organizations authentic core values sure does. Core values light the way for your employees, lead other people to join your organization and encourage others to do business with it.

Core values are not created out of thin air. A company needs to discover them. They are the essence of who the company is and what they will become.

The definition of “core” is “the central or most important part of something.” The definition of “values” is “a person’s principles or standards of behavior; one’s judgment of what is important in life”. A key word in each definition is “important”. Thinking about that definition, what is important to companies with whom you conduct business?

This is a key question to ask companies with whom you are considering doing business with. Do they believe what you believe and value what you value? If your values are not in alignment with those you transact business with, then there are likely to be issues as the relationship grows and evolves.

Read more »

Why Your Contract Needs a Limitation of Liability Clause

Posted by & filed under BDP Blog.

By Cindy Russell
Assistant Vice President, Senior Claims Examiner, Berkley Alliance Managers, a Berkley Company

March 10, 2022

News headlines: Architect pays $1 Million for Design Error on $15 Million Construction Project; Civil Engineer Tagged with a $250,000 Jury Verdict Because of Drainage Design Error – I could go on. Want to avoid your name in a headline like this? Include a limitation of liability clause in all your contracts (or as many as you can) and then the headline might read: Design Professional Only Pays $50,000 After $1 Million Verdict.

Contracts are a valuable tool for protecting design professionals when considering and agreeing to participate in projects. One way a contract can do this is by including a limitation of liability clause to manage the potential financial risks involved. However, note that the enforceability of this type of contract clause varies from state to state.

Some things to keep in mind when drafting a limitation of liability clause:

  • it should be reasonable (you’re unlikely to get a client to agree to a limitation of $10,000 when your fee is $500,000). The limit can be a specific dollar amount, equal to your fee or limited to the available limit on your professional liability policy;
  • it may need to be more visible than all the other contract terms and conditions (for example, underlined, bolded or a larger font), depending upon case law in the state governing the contract;
  • and the contract is strongest if signed by both parties (in some jurisdictions the contract and/or its terms and conditions may not be enforceable if it’s not signed).
Read more »

Complimentary Webinar: Ethics for Engineers, Architects, and Other Design Professionals

Posted by & filed under Events.

Presented by:
Brian Sutter, ESQ. Managing Partner, Sugarman Law Firm LLP
Stephen Davoli, ESQ. Partner, Sugarman Law Firm LLP
Andrew D. Mendelson, FAIA, Senior Vice President, Chief Risk Management Officer, Berkley Design Professional

Tuesday, March 22, 2022
10:00 am – 11:15 am Pacific Daylight Time
1.25 AIA Learning Units
1.25 RCEP Professional Development Hours
Health Safety and Welfare Qualified

Berkley DP policyholders who participate in this program can qualify for a 15% Risk Management Education credit. Contact your agent for further information*

This webinar has been recorded and is available on demand for Berkley Design Professional policyholders and our appointed agents and brokers on the BDP Risk® Learning Management System.

bdp Risk® lms login

Ethical behavior is integral to the practice of architecture and engineering, necessitated by the professional’s duty to protect the health, safety, and welfare of the public. Making decisions and taking action can be complicated by ethical obligations imposed by multiple bodies: professional association codes of conduct, state practice acts, and licensing board requirements. Using professional association codes of conduct as a framework, this workshop offers a four-step process to make sound ethical decisions and explores real-life ethical cases to illustrate the challenges, dilemmas, and consequences of unethical behavior. In addition, participants will take away six key strategies to avoid ethical problems.

Read more »

Ask an Underwriter

Posted by & filed under Ask an Underwriter.

What are deductible credits?

A method of recompense that rewards our policyholders for successful risk management procedures and/or a good loss history with BDP by reducing their deductible. Multiple deductible credits are available and may reduce the policyholder’s deductible obligation up to 50% or a maximum of $50,000. This benefit should be considered when comparing deductible options from other carriers.

Got Uncertainty? We can help!

Posted by & filed under BDP Blog.

By Robert J. Connor, JD, CIC
Senior Vice President, Chief Marketing Officer, Berkley Alliance Managers, a Berkley Company

February 10, 2022

Uncertainty is all around us. You can’t deny it. If there is anything the past two years have taught us it’s that you never know what’s coming around the corner. This is unnerving and can create anxiety. As human beings, we crave stability and structure – even when we think outside the box. At Berkley Design Professional, we not only acknowledge this uncertainty, we embrace it. We want to help you embrace it too so that together we can transform your uncertainty into opportunity. Doing so enables you and your clients to confidently build a better tomorrow.

This idea of transforming uncertainty, is our Why, our rallying cry and why we are passionate about serving our brokers and policyholders.

Our new vision statement states it more succinctly:

To transform uncertainty into opportunity so you can confidently build a better tomorrow.

Read more »

Berkley Design Professional’s BDP Risk® Learning Management System Wins Both Gold and Silver 2021 Brandon Hall Group Awards

Posted by & filed under News Releases.

Monterey, Calif. (December 15, 2021) – The BDP Risk® Learning Management System (LMS) from Berkley Design Professional (BDP), a division of Berkley Alliance Managers, a Berkley Company, has won the Brandon Hall Group Excellence Award for Learning for the third consecutive year. This year’s Silver Award within the “Best Advance in Custom Content” category reaffirmed Berkley Design Professional’s sustained results in helping design professionals improve their practices and mitigate professional liability claims.

In addition to this highly-coveted honor recognizing self-paced, custom-designed online courses related to workplace learning, the BDP Risk® LMS program also received the Brandon Hall Group 2021 Gold Award for “Best Advance in Creating an Extended Enterprise Learning Program.” The award acknowledges the organization’s successful efforts to attract and retain customers with specialized, impactful content.

“BDP Risk® is a state-of-the art risk management program and LMS platform that helps policyholders avoid professional liability claims, improve management practices, enhance business performance and qualify for premium rating credits,” said Diane P. Mika, vice president and director of risk management education at Berkley Design Professional. “As a result of these widely recognized and value-added benefits, usage of the LMS has helped us attract new clients, retain existing clients and decrease the frequency of claims.”

Read more »

Let’s Write More Express 24!

Posted by & filed under BDP Blog.

December 9, 2021

Next time your A&E client needs professional liability insurance, think about Express 24 from Berkley Design Professional!

What’s Express 24? For qualifying firms, Express 24 is a 24-month, guaranteed premium policy with an aggregate limit that spans both policy years.* Best of all, it offers design firms substantial limits at a discounted cost!

This makes Express 24 a great solution for any design firm looking to keep their professional liability insurance and lower their cost. In short, it’s comprehensive coverage at a cost savings!

Sounds great, doesn’t it?

Now, how exactly does it work? Glad you asked! Let’s take a look at an example:

  • XYZ Architects has an Express 24 policy with limits of $1 million per claim / $3 million aggregate
  • This means they have $3 million dollars in limits to span the 24-month policy period! The maximum paid for each claim would be $1 million dollars. The total amount paid for all claims would be $3 million dollars.

To summarize, Express 24 offers an aggregate limit of no less than two times per claim. The aggregate limit spans the full 24 months. Higher policy limits at discounted prices!

Read more »