The purpose of your Professional Liability Insurance is to step in where loss prevention has failed. The protection that is offered by your Professional Liability insurance policy could be lost through ignorance of its terms, and failure to understand its operation.
The first step is obviously to recognise a claim situation. There are two possibilities.
For the sake of brevity, the word "claim" is used loosely to describe either of these situations. What happens next?
Your policy covers claims reported during the currency of the policy, regardless of when the negligent act, error or omission giving rise to the claim occurred, provided that you were unaware of the negligent act, error or omission at the inception date of the policy. It is also clear that claims made after the expiry date of the policy are not covered even though the services giving rise to the claim were rendered during the policy period. Due to the long interval, which usually exists between the time a negligent act, error or omission occurs and the time the resulting claim is first made against the Insured, it is paramount that you maintain a current policy with full prior acts cover if you wish to be covered for both current and prior work.
Supply the Insurers with all relevant information regarding the claim or the incident. If a claim has actually been made or suit commenced, attach every demand, summons, notice or other process received. You may have doubts about reporting a claim, especially if the amount involved is less than your deductible, or you believe that the matter is frivolous and will not develop into a claim. Any doubts should be resolved in favour of reporting any situation to your insurer.
Do not admit to any error until you have thoroughly researched all the documentation and sought the advice of your Legal Counsel or your Insurers. You may think that you can settle or negotiate a claim settlement on your own. Do not do this. Insurers are well versed in the defense of such claims and use lawyers with expertise in this field. If you do decide to settle or negotiate a claim without recourse to the Insurers of your policy, you may be prevented later, from obtaining indemnity under the policy should your negotiations subsequently take a turn for the worse. You may be reluctant to report a claim because you think it will affect your premium. This is not necessarily true. The size of the claim reserve, the degree of carelessness and the size and frequency of previous claims, will collectively determine whether or not a surcharge is to be levied at the Insurer's discretion. You must however maintain communication with all parties, including the party that submitted the "claim". Failure to communicate may leave the Land Surveyor subject to additional liability.
Very briefly, in practical terms this is how your insurance contract will relate to a claims situation. In order to maintain a long term, stable insurance program, we urge and encourage all Land Surveyors to play a part in the reduction of losses. Traditional ways of obtaining this type of protection at a reasonable cost without having to make any special effort to prevent losses, has become a thing of the past. The following points will assist ALL Land Surveying firms to play their part:
Firstly - please read your insurance contract.
Secondly - please make sure that you maintain a current policy with adequate policy limits.
Thirdly - please keep your broker advised of changes that may affect your insurance protection - changes of status, activities, changes in the legal structure of the firm, mergers, acquisitions, dissolutions and changes in surveyors employed by the company
Jardine Lloyd Thompson Canada Inc. is part of the worldwide Jardine Lloyd Thompson Insurance Brokerage Group. Jardine Lloyd Thompson and its subsidiaries specialise in professional liability insurance, handling of professional liability insurance claims and arranging captive insurance companies.
The information contained herein is believed to be accurate, but individual circumstances, local business and insurance practice and the Law can vary extensively and Jardine Lloyd Thompson and its associated and subsidiary companies are not responsible for any errors and omissions or any loss or damage arising from the use of this information. In the event of situations such as are described in this bulletin, the reader should seek legal counsel and specific advice from Jardine Lloyd Thompson or your Insurance Broker.
© 2001 Jardine Lloyd Thompson Canada