Specialty Design Insurance

This coverage protects individual architects, engineers, architectural firms, and engineering firms against allegations of damages due to their professional negligence. The professional qualifications of principals, details of staff organization, and types of work performed are important underwriting and rating considerations. Coverage is written on a claims-made basis and is usually subject to high deductibles.

Builders risk coverage forms insure buildings and other structures that are under construction. They are available for a single structure or multiple structures. Premiums can be paid at inception or be based on a deposit premium and periodic reports of value accompanied by premium payments. Coverage is usually for "all risk" perils or causes of loss and may include earthquake, flood, and collapse. Endorsements are used to broaden, limit, or customize coverage as needed. Deductibles are required. This builders risk coverage with design error includes damage to a building that results directly from an error in its design. It is written as standard builders risk coverage but has an additional charge for design error coverage, which is subject to its own deductible.

This insurance covers errors in programs or in systems designed by computer software designers and consultants. In many cases, computer consultants' errors and omissions coverage is written as part of a package arranged for computer firms.

The design and build concept of construction contracts consists of a contractor and architect under the construction firm's management being responsible for the project from its inception through the design process, during construction, and until it is completed. The construction firm may have its own design capability, own a subsidiary design firm, or hire an independent architect and engineering firm. One important feature of this coverage is professional liability for the construction firm that has both design and build functions.

Engineers design systems, roadways, bridges, dams, buildings, and other structures. A failure in the design can result in significant bodily injury or property damage. This coverage is available to protect the individual professionals and the engineering companies against claims for damages that arise from errors, omissions, or negligent acts in their professional responsibilities. It is usually subject to high deductibles and is written on a claims-made basis by:

Golf course architects are involved in the construction of most new and reworked golf courses in the country. Their teams combine the talents of engineers for drainage issues, horticulturists for choice of plant material, and landscape architects for the design and construction elements necessary in this narrow specialty.

This professional liability insurance covers negligent acts, errors, or omissions that interior designers commit while providing their professional interior design services. It applies to liability for errors and omissions that arise from advice given to clients on proper decor for building interiors, office layouts, and dwellings. Claims-conscious clients may sue an interior designer if any advice or work performed leads to actual or alleged financial loss.

Many businesses have established themselves as specialists in computer website design and consulting. These companies serve small businesses and help them market their products on the Internet. Other services provided include process reengineering, networking, and technical writing. Insurance package policies have been developed that cover personal injury liability, including libel, slander, copyright, and trade slogan infringement stemming from electronic communication of information or unauthorized access to a website. They may also cover loss or damage to computer equipment or media and data from vandalism or computer virus, and protection of customers' funds fraudulently withdrawn electronically.

Irrigation is an increasingly necessary component in nearly every kind of development, regardless of location. Designs include parks, commercial locations, office parks, athletic fields, stadiums, golf courses, and private residences. Subspecialties of irrigation design include drip irrigation, surface, sprinklers, turf, and agricultural irrigation. Common errors and omissions claims include landslide due to oversaturation; problems with plant growth; and other soil-specific situations. A new area of exposure is that of green buildings that incorporate rooftop gardens.

This coverage protects land surveyors against claims that allege negligent acts, errors, or omissions in performing their professional duties as land surveyors. Errors made in judgment or mathematical computations, particularly in establishing boundaries of properties, may result in serious financial losses to the surveyor's client. Detailed applications are required.

Landscape architecture combines the talents of plant selection (horticulture), drainage (engineering), and structure (architecture) with diminished exposures of both planning and irrigation. Landscape architects are licensed in most states and most universities offer graduate level degrees in this specialty. Design exposures include playgrounds, tot-lots, residential and commercial common areas, parks, and upscale residential properties. Landscape architects usually provide construction documents and may offer construction management services. They operate as either design-only firms or as part of a design/build landscape contractor firm.

This specialty engineering liability exposure is a unique and difficult-to-place architects and engineers professional liability coverage. Engineers who specialize in soil formations and properties work on building projects and analyze the soil's quality for stability and the ability of the foundations of buildings erected on the site to withstand erosion or deterioration. Soil conditions must also be analyzed for bridge, highway, and dam projects. Lawsuits brought because of building collapse due to substandard soil conditions often involve the soil engineer who first inspected soil properties.

Structural steel forms the skeleton of many commercial structures. Any errors in the construction process can violate the entire structure's structural integrity. Employees often work at heights. Cranes and other large, expensive contractor's equipment must be used. Substantial inland marine equipment schedules, significant liability exposures, and potential for serious workers compensation injuries make this a difficult class to insure.

Following are some examples of Specialty Design Insurance claims and the corresponding insurance coverages that can help pay for them:

1. Intellectual Property Infringement: A company specializing in furniture design has been accused of infringing upon another company's patented design. The claimant demands compensation for lost profits and requests the company to cease production of the allegedly infringing furniture item. The Specialty Design Insurance can help by covering the legal costs related to defending against the infringement claim. It can also provide indemnity for any damages or settlements that may be awarded to the claimant, helping the insured company handle the financial burden of the lawsuit.

2. Professional Negligence: An architectural firm is sued by a client who alleges that the design of their building was faulty, causing significant structural problems and financial losses. In this case, Specialty Design Insurance can help by covering the costs of hiring expert witnesses and legal defense. Should the architectural firm be found liable, the insurance would also cover the damages awarded to the client, shielding the firm from potentially devastating financial consequences.

3. Breach of Contract: A graphic design company is accused of failing to deliver on a contract, leading to the client suing for lost revenue. With Specialty Design Insurance, the design company would be able to handle the legal defense costs associated with the lawsuit. If the court rules in favor of the client, the insurance policy would also cover the compensation awarded, helping the graphic design company to manage this unexpected expense.

4. Product Liability: A product design firm is sued by a consumer claiming that the design of a product caused personal injury due to a design flaw. Specialty Design Insurance would cover the costs associated with the legal defense, as well as any potential payouts if the firm is found liable for the injury. This allows the firm to focus on their core business without the worry of financial ruin from a lawsuit.

5. Defamation: An interior design company is sued for defamation by a competitor following a negative review posted online. The competitor claims the review damaged their reputation and caused financial harm. Here, Specialty Design Insurance would cover the legal costs of defending against the defamation claim, as well as any damages that may be awarded to the claimant. This can save the interior design company from substantial financial distress.