Per-Claim Limits of Engineering Firms: April 2020
In the final analysis of your firm, the deductibles and limits your firm decides upon is a decision based on many factors. Each firm is different and each firm’s attitude toward risk is different; there is no magic number or formula. Firms must decide for themselves what is prudent for them.
60%
50%
40%
30%
20%
10%
0%
$100
$500
$5,000
$250
$1,000
$2,000
$3,000
Limits in $1,000s
Smaller firms = annual billings $5 million and below Larger firms = annual billings over $5 million
Percentage of Deductibles to Gross Billings for Engineering Firms
Firms should consider if the clients they provide professional services to and certain projects are riskier than others. Does the firm have adequate capacity and experience to provide professional services for these clients and projects? How a firm answers these questions will help determine a firm’s appetite for risk and, therefore, what deductible and policy limits may be appropriate.
1.5%
1.2%
.9%
.6%
.3%
0%
2010
2012
2016
2011
2013
2014
2015
2017
2018
2019
36 • From Risk to Profit - Benchmarking and Claims Studies
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