Survey: Insurance rates rising for architects, engineers

A survey by Ames and Gough revealed that 62% of architects and engineers had their insurance rates rise in 2012 with none dropping. Capacity for professional liability insurance, however, remains stable and is projected to remain so.

03/12/2013


A survey by insurance broker Ames & Gough finds a majority of insurers expect to seek further increases this year even as their overall claim experience in this line remains flat. 

According to the Ames & Gough survey of 13 leading insurance companies (which, on a combined basis, represent more than 70% of the marketplace providing professional liability insurance to architects and engineers in the U.S.), 62% had rate increases last year and the remaining insurers had flat rates. None saw their premium rates drop. Half with the higher rates had average increases of 6% to 10% or more.  

For 2013, 69% of insurers are planning rate increases. The expectations as to the size of these increases range from the low single digits to 10% or more with the average expected increase in the 4% to 8% range. The survey traced the insurers’ drive for higher rates to a variety of factors. More than half (56%) of those planning increases indicated rates had been inadequate as a result of premium reductions over time. Historic claims experience (losses going back more than two years) was the second biggest factor, cited by 44% of those planning to raise rates. Rising reinsurance costs and recent claims experience each were cited by 11% of the insurers as factors driving up rates. 

Despite the rate increases, capacity for architects and engineers professional liability insurance remains stable. To help keep their costs under control some firms are looking at increasing the size of their policy deductibles and/or purchasing so-called “split limit” policies as a way to increase protection while holding down premium costs.  For instance, a split-limit policy might have a $2 million per claim limit and a $4 million aggregate limit. Others are relying on “single-project excess limits” to meet demands for more insurance. 

From the insurers’ perspective, rate changes for an individual account may be driven by a number of considerations. This year, type of projects was cited by 87% of survey participants as the biggest driver of rate changes. That was followed by loss experience within the past two years (70%) type of work or service (62%) and historic loss experience (more than two years), cited by 39%.



No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
Control Engineering Leaders Under 40 identifies and gives recognition to young engineers who...
Learn more about methods used to ensure that the integration between the safety system and the process control...
Adding industrial toughness and reliability to Ethernet eGuide
Technological advances like multiple-in-multiple-out (MIMO) transmitting and receiving
Virtualization advice: 4 ways splitting servers can help manufacturing; Efficient motion controls; Fill the brain drain; Learn from the HART Plant of the Year
Two sides to process safety: Combining human and technical factors in your program; Preparing HMI graphics for migrations; Mechatronics and safety; Engineers' Choice Awards
Detecting security breaches: Forensic invenstigations depend on knowing your networks inside and out; Wireless workers; Opening robotic control; Product exclusive: Robust encoders
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
News and comments from Control Engineering process industries editor, Peter Welander.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
Anthony Baker is a fictitious aggregation of experts from Callisto Integration, providing manufacturing consulting and systems integration.
Integrator Guide

Integrator Guide

Search the online Automation Integrator Guide
 

Create New Listing

Visit the System Integrators page to view past winners of Control Engineering's System Integrator of the Year Award and learn how to enter the competition. You will also find more information on system integrators and Control System Integrators Association.

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.