Engineering Inc - July/August 2019 - 27
2019 PLI Survey of
ACEC Member Firms:
Still a
Buyer's
Market
XIJIAN / GETTY IMAGES
BY MAUREEN CONLEY
MEMBER FIRMS REPORT INCREASED REVENUE; CLAIMS ALSO ON THE RISE
Continuing the trend revealed in past professional liability
insurance (PLI) surveys, ACEC's 2019 PLI survey of Member
Firms finds the market remains in favor of the buyer despite
continued and emerging risks concurrent with the increase in
revenue reported by Member Firms.
Business for design engineers is very robust, according to Jim
Messmore, senior vice president at Hanson Professional Services,
Inc., and former chair of the ACEC Risk Management Committee. "This year, basically all the disciplines are reporting very
strong growth," he says. With the exception of a brief decline in
2016, Messmore says the majority of firms have reported revenue
increases every year since 2010. Of the 333 firms that responded
to the PLI survey, 77 percent report higher revenue than last year,
with 67 percent seeing increases of 5 percent or more.
As a result, PLI remains readily available, and rates are flat. It
is the first time Messmore remembers that everyone surveyed is
carrying PLI-another sign of a robust industry.
"Even if carriers want rate increases, it is difficult due to the
competition," says Mark Jackson, president of a/e ProNet and
founding partner of JCJ Insurance.
Consistent and stable rates remain true, of course, unless a
firm's loss experience or risk management practices require a
higher rate, according to Kevin Collins, senior vice president
and underwriting manager at Victor O. Schinnerer & Co.
Even though premiums usually rise when revenues grow, only
22 percent of Member Firms reported higher premiums.
"There is certainly ample capacity, but we are seeing carriers
either pulling out or pulling back on their writing of PLI, while
new ones continue to enter the market," says Al Rabasca, director of industry relations at AXA XL. "The challenge is many
new carriers offer unrealistically, and in some cases, irresponsibly
low premiums that could drive them out of the market."
CLAIMS COMPARISON
With more work comes more claims. The percentage of firms
reporting more claims than the prior year is rising-from
17 percent in 2016 to 26 percent in 2017 and 30 percent in
2018. Communication and errors and omissions of a technical
nature remain the largest factors in claims against design firms, at
59 percent and 56 percent, respectively. Third-party claims, project management, scope of services and contracts played a role in
about one-third of the claims in 2018.
"As busy as everybody is, it is no wonder claims are generally
increasing across the industry. Based on the volume of work,
people could get stretched thin-there may be less focus on
quality control because firms are trying to get things out the
door," says Tim Haener, president and project manager at J-U-B
Engineers, Inc.
JULY / AUGUST 2019
ENGINEERING INC.
27
Engineering Inc - July/August 2019
Table of Contents for the Digital Edition of Engineering Inc - July/August 2019
Engineering Inc. - July/August 2019
Contents
From Acec to You
Market Watch
Legislative Action
The Private Side
From A Global Perspective
Navigating A New Future
Protecting Your Firm Against Cyberattacks
Pli Market Remains Steady
A Half-Century Of Caring
2019 Acec Member Survey
Risk Management
In The News
Mergers And Acquisitions
Members In The News
Business Insights
Engineering Inc - July/August 2019 - Intro
Engineering Inc - July/August 2019 - Engineering Inc. - July/August 2019
Engineering Inc - July/August 2019 - Cover2
Engineering Inc - July/August 2019 - T1
Engineering Inc - July/August 2019 - T2
Engineering Inc - July/August 2019 - T3
Engineering Inc - July/August 2019 - T4
Engineering Inc - July/August 2019 - T5
Engineering Inc - July/August 2019 - T6
Engineering Inc - July/August 2019 - T7
Engineering Inc - July/August 2019 - T8
Engineering Inc - July/August 2019 - Contents
Engineering Inc - July/August 2019 - 2
Engineering Inc - July/August 2019 - 3
Engineering Inc - July/August 2019 - From Acec to You
Engineering Inc - July/August 2019 - 5
Engineering Inc - July/August 2019 - Market Watch
Engineering Inc - July/August 2019 - 7
Engineering Inc - July/August 2019 - Legislative Action
Engineering Inc - July/August 2019 - 9
Engineering Inc - July/August 2019 - The Private Side
Engineering Inc - July/August 2019 - 11
Engineering Inc - July/August 2019 - From A Global Perspective
Engineering Inc - July/August 2019 - 13
Engineering Inc - July/August 2019 - 14
Engineering Inc - July/August 2019 - 15
Engineering Inc - July/August 2019 - 16
Engineering Inc - July/August 2019 - 17
Engineering Inc - July/August 2019 - Navigating A New Future
Engineering Inc - July/August 2019 - 19
Engineering Inc - July/August 2019 - 20
Engineering Inc - July/August 2019 - 21
Engineering Inc - July/August 2019 - Protecting Your Firm Against Cyberattacks
Engineering Inc - July/August 2019 - 23
Engineering Inc - July/August 2019 - 24
Engineering Inc - July/August 2019 - 25
Engineering Inc - July/August 2019 - 26
Engineering Inc - July/August 2019 - Pli Market Remains Steady
Engineering Inc - July/August 2019 - 28
Engineering Inc - July/August 2019 - 29
Engineering Inc - July/August 2019 - 30
Engineering Inc - July/August 2019 - 31
Engineering Inc - July/August 2019 - 32
Engineering Inc - July/August 2019 - 33
Engineering Inc - July/August 2019 - 34
Engineering Inc - July/August 2019 - 35
Engineering Inc - July/August 2019 - A Half-Century Of Caring
Engineering Inc - July/August 2019 - 37
Engineering Inc - July/August 2019 - 38
Engineering Inc - July/August 2019 - 39
Engineering Inc - July/August 2019 - 2019 Acec Member Survey
Engineering Inc - July/August 2019 - 41
Engineering Inc - July/August 2019 - Risk Management
Engineering Inc - July/August 2019 - 43
Engineering Inc - July/August 2019 - In The News
Engineering Inc - July/August 2019 - 45
Engineering Inc - July/August 2019 - Mergers And Acquisitions
Engineering Inc - July/August 2019 - 47
Engineering Inc - July/August 2019 - 48
Engineering Inc - July/August 2019 - Members In The News
Engineering Inc - July/August 2019 - 50
Engineering Inc - July/August 2019 - 51
Engineering Inc - July/August 2019 - Business Insights
Engineering Inc - July/August 2019 - Cover3
Engineering Inc - July/August 2019 - Cover4
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