Last year, 30 percent of these insurers saw rates decrease, while 40 percent said rates were flat. The rest, 30 percent, experienced increases, some approaching double digits, according to the survey.

Ames & Gough, which places insurance for more than 900 architects, engineering firms and other construction professionals of all sizes, said that small architectural and engineering firms generally received decreases in premium rates in 2010, while larger firms were subject to premium increases driven by claims or larger reductions in exposures.

Looking ahead, the broker noted that with construction volume down and reducing insured exposures, underwriters are seeking to catch up on reduced premium volume by charging higher rates.

The broker does not believe that the recent buyers’ market has ended, however, stressing that while the survey shows “a definite stabilizing” in the A&E professional liability market, also known as the A&E errors and omissions market, “there is very little to suggest any dramatic upward swing in rates.”

Dan Knise, Ames & Gough’s president and chief executive officer, said, “Recent renewals show that while the overall insurance market for architects and engineers professional liability coverage is stabilizing, newer players in this segment are still creating competition.”

“Smaller and midsize architectural and engineering firms are the ones seeing the greatest benefit,” he continued. “Still, firms thinking about changing insurers should carefully weigh the value of continuity and stability against the near-term opportunity for a lower premium payment,” he advised in a statement released with the survey findings.

In an e-mail response to questions from NU, Mr. Knise said, “I think the survey is an indication of insurers’ overall desire to see a firming of the market. Again, we would observe, however, that competition is preventing this from really happening to any great degree.”

He said this class of business has been especially hard hit due to:

• The exposure decreases related to reduced professional fees/reduced demand for engineering and architectural services.

• Some uptick in claims related to the economy.

According to the survey, among those insurers that plan to seek higher rates in 2011, 40 percent said they plan hikes in the 10-40 percent range. Another 40 percent expect to seek increases of 3-5 percent, and 20 percent will seek increases of 0-2 percent.

Ames & Gough said insurers are seeking incremental increases on renewals for firms that have had significant claims or reduced exposures. Where there is stability in claims or exposure, the market has remained flat, the broker said.

Limits are available up to $50 million for layered insurance risks. From any one insurer, 30 percent said they will provide up to $5 million, and 50 percent are willing to provide up to $10 million to $20 million in coverage. A total of 20 percent said they would go up to $25 million.

In the survey report, Ames & Gough includes insights about the typical E&O limits carried by A&E and construction firms based on their billings. The broker also offers guidance to help ensure accurate underwriting and pricing assessments from insurers—advising insureds to properly categorize fees into high- and low-risk buckets (with condominiums being high risk, for example).

While 80 percent of carriers surveyed said recent claims experience was the main consideration for underwriting and pricing, responses about other rate change drivers broke down as follows:

• Type of work or service was cited by 60 percent.

• Type of project was a key consideration for 40 percent.

• Historic loss experience was named by 40 percent of insurers.

• Quality of the firm’s leadership or governance was cited in 10 percent.

To combat competition, the survey found insurers seek to differentiate themselves. Sixty percent cited claims service as a differentiator. Breadth of coverage and risk management support was noted as a differentiator by 50 percent of insurers. International capabilities were cited by only 10 percent.