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Purchasing Supplemental Limits for Design Firms
There have recently been some underwriting changes which will affect the Supplemental Limit of Liability Endorsements, or SALEs. SALEs were created to supplement an insured's policy limit when participation in certain projects is contingent upon having a higher limit. The supplemental limit is not intended to replace project insurance but is a tool to allow firms to carry appropriate limits on a particular project.
What kind of changes are being made?
One of the major differences you will see as a broker is our method of communication. We standardized our processes to serve you better. We are also gathering more specific information about your insured's project to properly assess and price their risk. One important note: All ballparks and quotes will be sent to you in writing. We will not do any verbal quotations.
How do I write a SALE?
If you want us to provide you a ballpark premium indication, you must send in the supplemental application. Your underwriter can fax you a copy. It is also available on our website. Along with the supplemental application, we must receive the indemnification and insurance sections of the contract as well as the names of all sub-consultants (if there are any) with the confirmation that they carry professional liability insurance.
We will send you our ballpark quote letter. We recently revised the letter so that it will not only provide you an estimate of future premiums, but also provide you with a more thorough explanation of our underwriting process for your client. The letter makes it clear to you what information we used to calculate the rate.
If you want to bind coverage, send us the Increased Limit Deductible Change Application, available on our website, and the contract in its entirety. Ballparks can not be bound.
We will send you our supplemental limit quote letter. We revised this letter as well to include notices of gaps in your insured's coverage.
Our Standard Guidelines - FYI
- The minimum underlying practice policy limit is $500,000.
- Only two SALEs are allowed per policy. If the endorsement is for a continuing service contract, we will only write one.
- When adding the endorsement mid-term (based on an annual period), 100% of the premium is due up front. We will not accept installments.
- When adding the endorsement mid-term (based on an annual period), the premium for that period is fully earned.
- SALEs are not available in the Contractor's Program.
- SALEs are not available if construction has already begun.
Limits are available in equal amounts per claim and in the aggregate. The minimum earned premium is $2,000 per million per year. When the Supplemental Limit is being added within 60 days of the policy expiration date, we will allow a short-rate adjustment subject to a minimum earned premium of $1,000 per million. Within 30 days of the policy expiration date, we will allow a short-rate adjustment subject to a minimum earned premium of $500 per million.
Have More Questions?
Talk to your underwriter. We'll be happy to talk more about SALEs with you or discuss a specific client you have in mind.
This information is for illustrative purposes only and is not a contract. It is intended to provide a general overview of the plan described. Please remember only the insurance policy can give actual terms, coverage, amounts, conditions and exclusions. Program availability and coverage are subject to state regulatory approval.
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