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Questions and Answers

What is the focus of the article by Ann Casso and Fredric Schultz?

Sustainable design practices
Selecting business and professional liability insurance for one’s firm (correct)
The history of architecture
Financial planning for architects

What are modern-day design professionals expected to do?

Find new ways of building projects better, faster, cheaper, and greener (correct)
Focus solely on financial responsibilities
Avoid taking any risks in their projects
Stick to traditional building methods

What does the quote 'When you stare into the abyss, the abyss stares back at you' refer to?

Risk management strategies for architects (correct)
Financial liabilities of architects
The challenges of sustainable design
The unpredictability of architectural projects

Who authored the white paper 'A Sustainable Standard Of Care' mentioned in the text?

David A. Ericksen, Esq. (D) Signup and view all the answers

What type of information does the database provide about each insurer?

Financial size category, A.M. Best rating, states and countries of coverage, benefits and coverage offered (A) Signup and view all the answers

What organizations participate in the Annual Professional Liability Insurance Survey with the AIA?

National Society of Professional Engineers (NSPE) and the American Council of Engineering Companies (ACEC) (B) Signup and view all the answers

Why are carriers reluctant to disclose certain information in the annual survey?

They consider some information proprietary (B) Signup and view all the answers

What does tail insurance address?

Protection upon retirement or withdrawal from practice (A) Signup and view all the answers

What is the purpose of 'tail' coverage for retired architects?

To be covered for all prior acts, even if claims are made in the future (C) Signup and view all the answers

What is one reason why some firms decide not to purchase professional liability insurance?

Cost of the coverage that could ultimately put the firm and its architects in jeopardy (C) Signup and view all the answers

What is the unique coverage trigger for professional liability insurance for architects?

The date that the claim is made (B) Signup and view all the answers

What is a retroactive date in professional liability insurance?

The date on or after which any alleged or actual act, error, or omission must have first commenced to be covered (D) Signup and view all the answers

What is the purpose of deductibles in insurance?

Requiring the insured to pay a portion of the loss on each claim (A) Signup and view all the answers

What do endorsements and exclusions do in an insurance policy?

Modify coverage (C) Signup and view all the answers

What does hold harmless or indemnification entail?

A contractual obligation where one party assumes another's legal liability (B) Signup and view all the answers

What are surplus lines insurers known for?

Providing coverage for unique risks when licensed or admitted insurers won't (D) Signup and view all the answers

What is a retroactive date intended for in professional liability insurance?

To limit coverage for past acts, errors, or omissions before a specified date. (B) Signup and view all the answers

What does a deductible do in an insurance policy?

Requires the insured to share the cost of covered expenses. (D) Signup and view all the answers

What is an endorsement in an insurance policy?

A written amendment modifying coverage. (B) Signup and view all the answers

What does hold harmless or indemnification mean in insurance terms?

One party assumes another's legal liability. (D) Signup and view all the answers

Why are surplus lines insurers used?

To provide coverage for unique risks when licensed insurers won't. (B) Signup and view all the answers

How does a retroactive date affect professional liability coverage?

It sets a limit on coverage for past acts, errors, or omissions before a specified date. (D) Signup and view all the answers

What are some risks architects face?

Negligence, property damage, personal risks, technology, and sustainability (D) Signup and view all the answers

What can negligence claims result in?

Damages to owners or third parties (D) Signup and view all the answers

Why do innovative projects and technologies require a redefinition of the standard of care?

Making architects liable for any new risks (C) Signup and view all the answers

What can expose architects to breach of fiduciary duty lawsuits?

Electronic data (B) Signup and view all the answers

What do architects need to protect their property and intellectual property from?

Fire, theft, and business interruption (B) Signup and view all the answers

What do insurance policies provide coverage for?

Professional liability, property loss, business income loss, automobile use, and personal risks (D) Signup and view all the answers

Why is understanding professional liability insurance terminology crucial?

For understanding coverage and reporting claims (A) Signup and view all the answers

When do claims-made policies for professional liability insurance require reporting a claim?

When it is made (B) Signup and view all the answers

What is the definition of a 'claim' in the context of insurance?

A demand for money, services or property based on a right (B) Signup and view all the answers

What is 'claim expense' in the context of insurance?

The cost of handling a claim (C) Signup and view all the answers

What does tail insurance provide for architects upon retirement or withdrawal from practice?

Protection for prior acts even if claims are made after retirement (C) Signup and view all the answers

Under what condition may an architect retiring from a firm purchase an extension to the firm's policy?

The architect has been insured for a minimum number of years with the insurer (D) Signup and view all the answers

In some states, what do admitted carriers have to provide retirees with, at an extra cost?

Tail coverage (D) Signup and view all the answers

What does Professional Liability Insurance (PLI) protect architects against?

Financial losses due to errors or negligence in the performance of professional duties (D) Signup and view all the answers

Why do firms maintain coverage of Professional Liability Insurance (PLI)?

To ensure business survival, continue operations during lawsuits, and fulfill contract requirements (B) Signup and view all the answers

According to the AIA Trust survey, what are the top considerations when selecting Professional Liability Insurance (PLI)?

A carrier's reputation for fair settlements, understanding coverage options, claims service, specific knowledge of AE professions, experience, and outstanding customer service. (D) Signup and view all the answers

When evaluating PLI, what should be considered about the insurance carrier?

Reputation, stability, claims handling process, access to specialized expertise, and customer service. (C) Signup and view all the answers

How many professional liability insurers serve architects in the US?

Over 50 (D) Signup and view all the answers

What does the selection process for PLI include?

Assessing a firm's exposures, reviewing policy forms and endorsements, and conducting a cost-benefit analysis for additional coverage options. (B) Signup and view all the answers

Why is stability of the insurance carrier crucial when evaluating PLI?

It ensures that the carrier can fulfill its obligations in case of claims. (D) Signup and view all the answers

Why are claims handling services essential when choosing PLI?

Look for carriers with specialized knowledge and expertise in architectural practice, effective defense counsel, and excellent customer service. (A) Signup and view all the answers

Flashcards

Focus of Casso and Schultz's article

Selecting business and professional liability insurance for one's firm.

Expectations for modern design professionals

Find new ways of building projects better, faster, cheaper, and greener.