Larger clients and government agencies increasingly include insurance requirements in their agreements. A professional services firm may be asked to carry a specific amount of professional liability insurance, name the client as an additional insured, or provide a certificate before work begins.
Reading those requirements carefully before signing can save time, and in some cases avoid breach of contract.
Minimum limits
Contracts often specify per-claim and aggregate limits. Compare them with what your policy provides and whether defense costs reduce the limit. A policy that looks adequate on paper may provide less available coverage if defense costs erode it.
Additional insured and waiver requests
Clients sometimes ask to be added as additional insureds on professional liability policies. Many E&O policies do not offer additional insured status in the way general liability policies do, though some carriers may provide limited endorsements. Raise the request with your agent early and see what is available.
Retroactive date and continuous coverage requirements
Some contracts require that coverage be maintained for a period after the project ends, or that the retroactive date precede the start of work. Because claims-made policies depend on retroactive dates and continuity, discuss these requirements before committing.
Indemnification and limitation of liability
Insurance clauses often appear next to indemnification language. If you agree to indemnify a client for broad categories of loss, it is worth checking whether your policy covers liability assumed under contract. Many E&O forms exclude or limit it.
Primary and noncontributory language
Requirements that your policy be primary may not be easy to satisfy under professional liability forms. Ask your agent how your carrier treats these requests.
Certificates and renewals
A certificate of insurance shows that coverage exists but does not change the policy. Be prepared to provide updated certificates at renewal and track expiration dates for required coverage.
Involve your agent before you sign
An independent agent can review contract language, compare options across carriers, and help you avoid commitments your policy cannot support. If a large contract is on your desk, we are glad to help.
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