Statement Regarding Insurance Limitations
 

We are often told by Architects and Owners that we must obtain professional liability insurance in an amount higher than we currently carry if we want to work on a project with them. We always explain why this is not possible and we are sometimes told that they will go elsewhere for consulting services if we will not make an effort to find a higher limit policy. Our current policy has a $1,000,000/$1,000,000 limit. View our certificate HERE.


This statement is provided to clarify this situation:


1.  While many companies have professional liability insurance, it varies greatly in its coverage. There are several types of policies. Electrical engineers can get policies that cover their work but as soon as the insurer discovers that they are developing a strategy of protection to protect millions of dollars--and sometimes Billions of dollars--in art or other museum collections, they are notified that their coverage does not cover this risk. Some have been cancelled by their insurer. Some consultants have a policy issued through a professional association that they call “professional liability insurance” but it is not true E &O coverage as required by architects and owners. It simply defends them against you and the policy specifically excludes burglar alarm design and does not cover losses of life, injuries, or losses or damage to property. A third type of professional liability insurance is true E&O but it specifically does not cover museum burglar alarm design or certain other risks.


2.  Our coverage is true professional liability insurance at the maximum amount available on the world market today. If we could get more, we would. But we can’t. No one can. It covers what we do and we can name the architect and owner as an additional insured if you request it.


3.  Higher limits are not available. We will not seek it because the application process takes hundreds of hours and involves providing copies of all current and some past projects to an insurance company to review. We have applied for additional coverage on many occasions in the past and have been told by our insurer not to ask for higher limits again. We have been told that our policy is a one of a kind policy and there is absolutely no chance of it being modified in any way.  We don’t care who you know, you can’t get it for us. We did a project for a famous Seattle billionaire who insisted that he could get higher limits and would pay for it. All we had to do is apply to the insurer who handles all of his personal and corporate insurance. After months of wasted time we were told that no one on the world market would write an higher limit policy.


4.  Our policy is a regular architect’s policy by a reputable insurer. In 24 years of business we have lost only one job because the owner would not believe that higher limits are not available. They subsequently hired a consultant who has no insurance whatsoever because the city’s insurance officer was too embarrassed to come back to us after making an ass of himself insisting that we didn’t know what we were talking about.  My point is that if the owner insists on higher limits it will be necessary to explain that higher limits are not available for security system design and protection strategy development for museum collections.


Why is this the case?


I asked an underwriter why they were so inflexible on this matter. His answer was this: “Let me get this straight. You want to design a security system to protect hundreds of millions of dollars in museum collections. Then you want to have it installed by a low bidder that you didn’t select. You are limited by the reality of the client’s budget, forced to design to that budget and not to what might be required. Due to the budget, you are limited to a minimum number of site visits to inspect the work. A reality of museum security is that even though 100% of the consultants recommend individual object protection only about 5% of the museums buy it because it is not required by national standard. The lighting system designer usually meets far less resistance in buying what he needs for the new building than the security system designer who is limited by the budget. The architect and the museum’s director or curator gets final say on what detectors you use and where they are placed because aesthetics always wins out over security. Museums are not prisons and by definition they cannot and never will meet what the industry defines as high security standards. No one would visit a museum with this level of security because all of the collections would be locked away in vaults instead of hung on walls within reach of anyone who approaches.”


“Then, when the system is finished you want to turn it over to a minimum wage guard who you don’t hire, screen, train or supervise and he operates the high tech computer system. You might design a system with a certain staffing and support plan in mind but you have no control over its implementation. The guard force is the first to get cut in every budget crunch. You have no say over how well the system is maintained and repaired or even whether they buy a service agreement. You can’t even control if they have a guard in the building after completion regardless of what they tell you in the design phase. A museum is a constantly changing environment and detectors are constantly being blocked or moved. You get no say in who does this or whether it meets Underwriters’ Laboratories standards. You have no control over guard training or whether the museum even has a security policy manual defining basic security procedures. But you want us, the insurer, to take lifelong responsibility and liability for it for the life of the building which is a century or more.”


He was right of course. Fine arts insurance will cover the owner for losses. Our work will meet all standards and I guarantee you that you will not let us include all of the security that we recommend due to the budget limits. So please consider this reality and understand why we will not seek modifications to our one of a kind insurance policy.