$10M Professional Liability (E&O) Insurance for Owner's Representatives

For owner's representative firms asked for $10M by a large client, $10M Professional Liability usually means a primary policy plus one or more follow-form excess layers.

What does a $10M requirement mean for owner's representatives?

Professional Liability (E&O, short for Errors and Omissions) can help when a client says your advice or services cost them money. Owner's reps may buy it as a construction or project management professional liability form. A $10M clause in a program agreement might read like this:

• Per claim and aggregate: the most paid for one claim, and for all claims in a policy year.
• Claims-made: the policy covers claims made and reported while it is active, for work after the retroactive date (the earliest date of work covered).
• Years after completion: you would usually renew every layer, with the same retroactive date, for the whole period. See tail coverage.
• Stacking: if your clause is silent on excess, confirm with the client that primary plus follow-form excess meets it.

Who asks owner's representatives for $10M?

Many owner's rep agreements ask for $1M to $3M, and some reach $5M. Unlike $5M, which firms often meet with one primary policy or a single excess layer, $10M usually needs two or more layers placed together. It reflects the size of the client's program, not your firm. It often comes from:

• Health systems running multi-year campus or hospital building programs.
• Public authorities such as airport, transit, port or housing agencies.
• Large universities with research, lab or housing programs.
• REITs, pension funds and sovereign or institutional investors using one standard agreement for every project.
• Construction lenders on very large loans, where you monitor draws for the lender.

How is $10M built?

A primary policy pays first. Each excess layer pays only after the layers below it are used up. "$5M xs $5M" means a $5M layer above the first $5M. A commercial umbrella almost never adds to Professional Liability. See why umbrellas fall short.

Each excess layer should follow form, meaning it uses the primary policy's terms. Every layer should share the same retroactive date and policy period, so there is no gap. Many Professional Liability policies pay defense costs inside the limit, and construction disputes can run for years. See defense costs inside or outside the limit.

What will underwriters ask for?

Underwriters are the carrier staff who decide whether to offer coverage.

• Construction value you manage, your largest programs and how many projects each manager oversees.
• Whether you approve pay applications, change orders or lender draws, or release funds for the owner.
• Whether you ever take on design, at-risk or self-performed work, or guarantee a budget or schedule.
• The agreement asking for $10M and your standard contract, including indemnity (a promise to cover the client's losses) and any limitation of liability clause (a cap on what you owe a client).
• Revenue by service, five years of loss runs (reports of past claims), open incidents and your current policy with its retroactive date.

What affects the cost?

• Program size and type. Hospitals, labs and transit work usually cost more to insure than office fit-outs.
• Authority over money and schedule. The more you approve and release, the more a carrier may charge.
• Tower shape. The primary layer usually costs the most per $1M of limit.
• Contract terms and claims history. Broad indemnity or past claims can raise the price or shrink the limit a carrier will offer.
• Retention and defense terms. A retention works like a deductible. A higher one usually lowers premium.

Frequently asked questions

Do I need $10M Professional Liability as an owner's representative?

Only if your agreement asks for it, which usually happens on very large programs. A hypothetical claim: you certify a contractor's draws on a large hospital building, and the lender later finds the work was far less complete than reported.

How do I get from $3M to $10M Professional Liability?

Request new quotes through Morrow for a higher primary limit, or for excess layers above a new primary. Morrow can request quotes that keep your retroactive date and prior acts coverage (cover for past work done before the new policy starts) where the market allows.

Can the owner or lender be added as an additional insured on my Professional Liability?

Usually not. Many policies exclude claims between insureds, so clients are not covered by default. In limited cases a carrier may add an owner or lender, usually only for liability arising from your services, and wording varies by layer. Many clients accept a certificate of insurance (a one-page proof of coverage) that lists every layer with its policy number, limit and policy period.

How long does it take to place $10M Professional Liability?

It varies, but it often takes several weeks, because each layer is underwritten.

This article is general information, not legal advice or a coverage determination. Coverage depends on the actual policy wording, carrier underwriting and your contract terms.