(July 2024)
This article discusses items that typically affect the pricing of Land Surveyors Professional Liability coverage.
The primary rating factor for Land Surveyors Professional Liability is a firm’s gross annual receipts for its services. Gross receipts are the best indicator of loss exposure and reflect other important elements such as a firm’s activity level, size of client base, type of projects and income from consulting fees.
Insurers typically provide different rates for the type of surveys performed, such as construction staking, mapping, right-of-way surveys, aerial mapping, etc.
Another important rating factor is a firm’s number of employees. This group may be broken down between the number of executives (principals, partners, directors, officers), supervisory employees, and the number and type of non-supervisory personnel. In such instances, a different rate may be assessed for each group. Part of the rating will be affected by the different types of employees, such as surveyors, engineers, and other professionals. Further, different rates may also apply to the level of experience and credentials held by a firm’s professionals.
An increased limits factor is normally applied based upon
the limit of insurance purchased.
As with any type of insurance, risks that have features which are better than average may be eligible for credits. Those that are more vulnerable to loss may receive debits. The eligibility for credits and debits is based on services and underwriting standards of the individual insurer, the loss control procedures in place, and the insured responsiveness and willingness to control and correct situations that may lead to claims, such as peer review, having competent counsel review contracts prior to performing services, and requiring employee compliance with continuing education and training (often connected with maintaining professional credentials).
Deductibles are a significant consideration for Land
Surveyors Professional Liability. Rather than a flat amount, deductibles tend
to be based upon a percentage (anywhere from one to five percent) of a firm’s
annual gross receipts. This approach is a superior method for firms to
participate in dealing with their exposure to losses. The approach also acts as
a motivator for a firm to practice effective loss management as its operations
grows.
The claims experience or loss history of the individual risk has a considerable impact on the pricing of the account. Frequency and severity are always a significant concern and are often reflected in the type of clients and survey services that dominate a given firm’s operations. A risk’s prior claim and loss history is reflective of the account’s potential for future losses and, as such, will have a great deal of bearing on premium.
Additional charges or credits may be applied based upon increases or reduction in coverage or exposure because of endorsements purchased. While available endorsements depend wholly on the insurer providing the land surveyor professional liability coverage, available endorsements may include options to buy back limited contractual liability, pollution liability, engineering services, products liability or the right select counsel. Rating will also be affected by restrictive options such as exclusion of specified activities and or projects.
Related Article: Land Surveyors Professional Liability Program Endorsements
One method for rating land surveyor professional liability is as follows:
Step 1. Select a base rate. This rate will be based on the type of operations.
Step 2. Add factors to be base rate that are based on number of professional employees or other relevant base information
Step 3. Multiply Step 2 by the applicable increased limit multiplier.
Step 4. Determine credit/debit multiplier based on individual risk criteria.
Step 5. Multiply Step 4 by Step 3 to develop a final rate.
Step 6. Multiply Step 5 by the land surveying gross receipts to develop the estimated annual premium.
Step 7. Compare Step 6 to the carrier’s minimum premium and use the higher of the two.
The rate developed in Step 5 will be used at audit to determine the final premium.