This is a story about the development of an insurance product that should be an integral part of the risk management needs of every interior designer.

In October, 1991, I received a telephone call from a good friend who is employed by an interior design firm here in Nashville, TN. She requested an insurance quotation for professional liability insurance for her firm as the firm was required to show evidence of professional liability insurance in order to present a bid for a project owner.

In 25 years of insurance marketing and agency management, I have been asked to insure a lot of unique and unusual exposures. However, I had never been approached about interior design professional liability. After making several inquiries with regional brokers, it was discovered that there were only a handful of insurance contracts (primarily miscellaneous errors and omissions policy forms) available to the interior design industry. Intrigued, I contacted the Institute of Business Designers (IBD) in Chicago, IL--now a part of the unified International Interior Design Association (IIDA)--to see if there was a professional liability program in place for its members and also to discover if any other industry association programs existed.

I found that the American Society of Interior Designers (ASID) professional liability program was the only industry-specific program throughout the interior design trade. This still did not fill the needs of my client or many of her associates and it was decided that the search must continue. Over the next few months with the encouragement of the IBD staff, Ritter Insurance conducted an internal review of the risk transfer options available to the commercial interior designer. We began surveying the insurance industry underwriters who might have the appetite to assist in the design development, implementation and underwriting of an aggressive professional liability program for the commercial interior designer.

Several insurance companies were contacted during the 18 months in which we were trying to put this program in place. Around February, 1993, it became apparent the National Union Fire Insurance Co., a division of American International Group (AIG), was serious about this project. We were thrilled to have such strong interest in this program by one of the world's leading insurance organizations. (Hank Greenburg, CEO of AIG is known throughout the financial world as a leader, a risk taker and has consistently demonstrated the uncanny ability to be able to identify insurance needs, money-making investments and opportunities.)

From spring 1993 to the culmination of the process resulting in IIDA's endorsement of this insurance program effective January 1, 1995, there has been a substantial amount of energy and effort expended by the staffs of National Union, Ritter Insurance, IIDA and the IIDA executive team. It is my opinion that the enthusiasm, thoroughness and perseverance of the IIDA staff and executive board have resulted in the development of an insurance product that serves the professional liability risk management needs of the professional interior designer more effectively that I would have dreamed possible when this project was first initiated.

The Liability Program was developed exclusively for IIDA members and offers exceptional coverage at a competitive price. The policy features:

• Liability limits of up to $1 million.
• Payments for legal costs, settlements and judgments associated with covered claims. Unlimited defense costs coverage also is available. Payment is subject to the applicable limit of liability for indemnity.
• Personal injury liability insurance, as well as coverage for bodily injury and property damage resulting from negligent acts, errors and omissions by the insured.
• The policy includes up to $100,000 in coverage for Americans with Disabilities Act (ADA) lawsuits arising from work performed by the designer. Higher limits may be purchased.
• Claims are settled with the insured's consent.

Not only is the policy customized for the specific needs of interior designers, but it can be tailored for each individual's unique situation. For instance, the policy offers insureds such options as retroactive coverage and an extended claims-reporting period.

Optional coverages are available as follows:

• ADA coverage: Insureds have the option of purchasing additional ADA coverage up to the full policy limits.
• Limited architectural services coverage: Coverage for certain architectural services is available by endorsement. Coverage applies to architectural services performed in conjunction with design services that do not substantially alter the structure of the building.
• Coverage for dealer's representatives: An enhancement to the basic Professional Liability Insurance policy offers insureds coverage for claims involving the buying, selling or installation of finished materials, furnishings or equipment.
• Additional defense cost: Additional defense cost may be purchased. Payment is subject to the applicable limit of liability for indemnity.

Ritter Insurance Agency, Inc., established in 1958, serves as the program administrator for IIDA's Professional Liability Coverage Program. A specialist in association insurance program management, Ritter operates nationwide. As program administrator, Ritter Insurance has formed the Design Professionals Risk Purchasing Group, Inc., a nonprofit Rhode Island corporation. This Risk Purchasing Group was established pursuant to the federal Liability Risk Retention Act, which authorizes the placement of Liability Insurance for homogeneous groups.

In this litigious time you, as professionals, realize the need to protect yourselves and your assets. The need for professional liability for the interior designer is here today. As your industry continues to grow this need will only increase. Keep in mind that you do not have to be wrong to be sued. Even a groundless lawsuit can take valuable time--and income--away from your practice. Legal fees can be tremendous and a significant damage award could mean bankruptcy for your firm.

If your business is important enough to work long hours, give your time, energy, creativity and passion, lose sleep, borrow money and place your corporate or personal assets at risk, then it makes sound business management to make sure you are adequately protected against the uncertainties in today's business environment which could potentially bankrupt your business or firm.

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