Read the policy’s notice requirements and contact the broker or insurer promptly when the firm receives a demand, an allegation of error, a complaint that may involve a loss, or another circumstance that could lead to a claim. Policies differ in how they define a claim and what information must be reported. A formal lawsuit may not be the first point at which notice is required. Ask the broker to explain the policy’s wording and the process for reporting a circumstance.
Give staff a simple escalation path. Tell project managers, principals, and the person who handles client correspondence whom to contact when a client alleges a design error, requests reimbursement, or threatens to involve counsel. Ask employees to forward the communication promptly and preserve related records. The firm can gather the contract, project files, correspondence, and a factual timeline while it seeks advice. Keep that record neutral and avoid speculation about responsibility.
Ask the broker or insurer what details to provide, how notice should be sent, and whether the firm should report the matter even if it is still investigating. Keep copies of the notice and the insurer’s response. Ask counsel how to handle communications with the client and whether any legal duties apply. Follow the insurer’s instructions about investigation, settlement, and choice of response providers. Do not admit fault, promise a remedy, settle, or incur substantial costs without understanding policy conditions and obtaining appropriate advice.
Timely notice does not mean the firm accepts responsibility. It gives the insurer an opportunity to assess the matter under the policy and advise on next steps. Delayed notice can create coverage issues if the policy required earlier reporting, so owners should not wait for a formal lawsuit or for complete technical certainty before asking about notice.
Review the event afterward. Confirm that the right people received the escalation, identify any delay in routing it, and update the firm’s complaint process or staff training. Keep the current policy and reporting instructions accessible to the people responsible for receiving client communications.
This is general education, not insurance or legal advice; the actual policy, qualified counsel, licensed PE judgment, and local codes govern.
