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O P I N I O N
As the outlook for AEC firms remains bright and professional liability insurance rates stay competitive, the time is right to make sure your firm has adequate protection. Heightened growth, heightened risk
T hings are looking up for design firms. They are doing far better than they did 10 years ago at the onset of the Great Recession. Today, most construction professional firms are busy and even have work backlogs. Most also experienced steady revenue growth in recent years and expect that trend to continue.
Rob Hughes GUEST SPEAKER
headline-grabbing professional liability claims: multi-million-dollar resolutions of several traffic volume/revenue projection claims in P3 projects; and the devastating pedestrian bridge collapse in south Florida. NAVIGATING A NEW LANDSCAPE. Can design firms draw from these situations and implement an “If your firm is not solely you, but a hard-working group of two to 200 or more, the intermediate and long- term risk of being under-insured is that your firm will not survive.”
Nonetheless, all is not perfect. Qualified professionals are hard to find, as are current/ future leaders and owners in firms. Competition for staff may be driving up salaries and overhead costs are rising. Yet, one cost that has decreased since 2008 is the cost of professional liability insurance. The soft commercial insurance market, flush with numerous competing carriers, began around 2011- 2012 – perhaps earlier given modest rate increases of 2008-2010 – when design firm revenues fell sharply. Today, claim activity seems on the rise, along with the cost of defending professional liability claims. The latter may be a function of lawyers and experts now charging higher hourly rates than in 2008. Meanwhile, there have been too many
See ROB HUGHES, page 12
THE ZWEIG LETTER July 23, 2018, ISSUE 1257
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