The Schinnerer program now offers a premium credit—an up-front reduction of 5% in the cost of insurance—for firms with good claims records that can show they meet certain risk mitigation criteria in their current practice management procedures. The credit is available to all but the largest firms in the Schinnerer program. It is currently offered in most states; some jurisdictions have not yet approved the benefit.
The risk mitigation premium credit program gives firms various ways of not only reducing their insurance costs but also increasing the likelihood of greater firm profitability. The Risk Mitigation Credits, applicable both for premiums and your deductible, are meant to encourage the use of a set of best practices, long recommended throughout the design industry. Firms must be aware of their exposures and incorporate procedures and techniques to enable them to practice profitably.
To receive the credit, firms must satisfy a baseline criterion and any three of six best practices criteria. The baseline criterion is a professional service agreement in writing. A written agreement is a fundamental risk management tool, essential to solidifying clear agreements on scope, time, and compensation. Once a firm can show that it uses written contracts that address important project-specific terms and conditions, it must routinely meet three of the following six criteria:
- Payment Terms/Invoicing—Does your firm have procedures for monitoring and collecting outstanding fees?
- Interprofessional Agreements with Insurance Certificates—Does your firm have a procedure in place that requires sub-consultants to provide you with insurance certificates evidencing general liability and professional liability coverages?
- Pre-Project Planning—Does your firm engage your clients in a pre-project planning process that results in a project definition document?
- Internal or External Project Peer Reviews—Are the instruments or deliverables of your professional services internally or externally peer reviewed prior to their delivery to the client?
- Constructability Reviews—Does your firm engage in a documented constructability review process during project design with client and contractor representatives?
- Submittal Management—On projects in which you perform construction contract administration services, do you maintain a documented submittal or shop drawing log
The Schinnerer program constantly evolves to support changes in how firms practice. These “best practices” are not coverage requirements nor are they part of the underwriting criteria for firms, but firms that have incorporated many of the procedures will benefit immediately from a premium credit as well as a deductible credit if they later have a claim.
Schinnerer offers the AIA Trust Professional Liability Insurance Program and Business Owners’ coverage to AIA members’ firms. Both programs are marketed and available through the AIA Trust.