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Your quotations for excess limits over the limits provided by the Ontario Association of Architects included an additional premium to offer coverage over limits which are reduced as a result of the implementation of the "Interlock" provision of the O.A.A. Policy. Please explain this. |
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The O.A.A. policy includes a provision which basically states that on any project for which coverage is provided by more than one Certificate of Coverage (i.e. where two architectural firms are working on the same project) the maximum amount they will pay as damages under all of the Certificates is the limit that would apply to one Certificate. If there is a large claim that exceeds the limit and each Architect is assessed a portion, then there will be a gap between the primary policy and the excess policy. the excess carrier would then look to the insured to make up this difference before the excess is triggered.
To use a numerical example: The limit per claim on the primary policy is $250,000. The claim is $500,000 and each Architect is assessed 50% responsibility or $250,000 each. As the Certificate of Coverage states that the maximum amount that the Association will pay as damages under all Certificates is the limit that applies to one Certificate, they would only pay $250,000, leaving each of the Architects responsible for the $125,000 gap before the Excess policy would apply. The purpose of the Interlock Extension is to cause our Excess policy to apply over the reduced underlying limit. |
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Can a broker, issue a Memorandum of Insurance for an Insured adding their client as an Additional Insured and providing the client with 30 days prior notice of cancellation or material change in risk? |
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No. There are a number of factors involved in this scenario and we do not allow the Broker to issue the Memorandum for the following reasons:
a) Our contracts with Underwriters do not allow us to delegate authority to brokers.
b) We do not permit Brokers to issue Memorandum with notice of cancellation because we need to know if we are responsible for providing prior notice to other parties. If the broker issues a Memorandum providing prior notice of cancellation to a client and we do not receive a copy then we would be on risk for that client even though the Insured's policy was cancelled. When we issue a Memorandum of Insurance we also endorse the Policy to demonstrate our acceptance of the additional exposure.
c) We do not add clients as Additional Insureds because our policies do not have a Cross Liability clause and they do have an Insured versus Insured exclusion. If the client was added as an additional Insured, they would not be able to sue the Insured for damages and collect from Insurers.
d) We do not provide notice of material change because it is an undefined term. What may be material to the client may not be material in the eyes of the Insured or the Insurer and vice versa. For example, if there was a claim on the Policy from another client of the Insured, we would be obligated to advise the holder of the Memorandum of the initial claim and every change in the status of the incurred amount because the aggregate limit on the policy would be effected by each change. |
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How do I apply for coverage? |
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Download the appropriate application (if you have a question about which application is correct, please call). Complete, sign, date and return the application and include C.V.'s (resumes) for each of the professionals on staff and any brochures that are available. Answer every question completely or state "N/A" if it is not applicable to your firm.
For Architects requesting limits in excess of their mandatory provincial association plan, please complete the Architects and Engineers application and include a copy of the Declaration page and each endorsement to that policy. Our policy will follow the form of the primary policy. |
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Will you provide terms based on another company's application? |
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Yes, we will provide a rough indication of terms subject to the receipt and acceptance of the original signed and dated Elliott Special Risks Ltd. application (or specific Insurer application in certain instances) prior to binding. The application also forms part of our policy document. |
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For how long are your quotes valid? |
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Our terms are valid for up to 30 days. After that, the information in the application must be re-submitted for review. In addition, each application ends with a claims declaration which must be signed and dated by the Insured. The date of signature must be less than 30 days old at the time of binding. If it is older we will need either a separate Claims Declaration from the Insured or the original application re-signed and re-dated. |
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We are a construction company that builds commercial buildings. We employ an engineer to do most of the design work. Is coverage available to protect the company if he makes any errors in his design work? |
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Yes. Our Design & Build policy is written in the name of the company, not in the name of the engineer. If an error is made by an employed engineer, the claimant will look to the company to rectify the damages. If only the engineer is covered for E&O cover, the company is left uninsured and must pay out of its own pockets to defend itself and pay for damages. |
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I recently signed a contract that requires me to carry E&O cover, even though I do not think that I need it. Can I purchase the coverage to satisfy the requirements of one contract only? |
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Sorry, we cannot provide cover on this basis. We recommend blanket cover for all your work. In recent years the requirement to carry insurance has become more common. |
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Do you offer policy terms longer than one year? |
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Yes, we can provide two year policies to applicants that meet our minimum requirements. The policy would be endorsed to provide an annual aggregate limit and the premium is payable in two installments, at inception and at the anniversary date. |
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Are your E&O policies written on a claims-made or occurrence form? |
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Our E&O policies are written on a claims-made form. |
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Why are you so insistent on obtaining the ORIGINAL signed and dated application before issuing our policy? Won't a faxed or e-mailed copy do? |
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Unfortunately not. Our policy is written on a "claims-made" basis and contains the usual exclusion for claims arising out of claims or circumstances known to the Insured at the time they sign the application. Therefore, the answers to the claims and circumstances questions contained in the application are paramount in risk evaluation and avoiding adverse selection and could be a principle defence raised in the event of a claims arising out of conditions "known to the Insured" at inception. Although faxed and e-mailed applications are gaining acceptance, at present it is not felt that they have the same legal weight as an original signed application and they would not be acceptable to pool underwriters. As the applications become part of the policy, we are obliged to hold off issuance of the policy until they are received. |
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