How to Categorize Your A/E Projects
for E&O Insurance Renewal
The revenue category summary is the hardest piece of the E&O renewal application to produce — not because the information is unavailable, but because projects are almost never tagged with the underwriter's category when they are opened. The result is an annual exercise of working backwards through a project list, making judgment calls about what belongs where, and hoping the categorization is consistent with how the underwriter will evaluate it. Here's how to solve this problem once at the project setup level, rather than every year at renewal.
The Categorization Problem Starts at Project Intake — Not at Renewal
Every year, in the weeks before E&O renewal, someone at most A/E firms opens the project list and starts working through it project by project — assigning each one to the underwriter's category from memory, project name, and whatever context is still available.
A hotel addition from two years ago — is that Hospitality or Commercial? A campus recreation center — is that Educational or Government? A fire station addition — is that Government or Public Safety? A mixed-use development with retail on the ground floor and residential above — how does that get split?
These judgment calls are made at renewal under time pressure, by someone who may not have been the project manager, about projects that may have closed before the current person even joined the firm. The categorization is reasonable. It is also inconsistent, unverifiable, and unauditable.
The underwriter, on the other side of the application, is making risk assessments based on these categories. Healthcare projects carry different risk assumptions than commercial office. Residential carries different assumptions than government institutions. When the categorization is imprecise, the underwriter's risk picture is imprecise — and a risk picture that's imprecise in the wrong direction can produce a higher premium than the firm's actual exposure warrants.
The fix is not to get better at the annual categorization exercise. It is to move the categorization to the moment it can be done accurately — when the project is opened.
→ Read: E&O Insurance Renewal for A/E Firms: The Complete Guide
The annual categorization exercise at renewal is inaccurate, not because the office manager is doing it wrong, but because she is doing it too late, from incomplete information, about projects whose details have faded.
The fix is tagging at project intake, so the project manager who knows the work can assign the category in 30 seconds.
Understanding Your Underwriter's Category List
Before any categorization system can be built, the firm needs to know what categories its underwriter actually uses. This sounds obvious — but many firms that have been renewing with the same carrier for years have never explicitly mapped their project portfolio to the carrier's classification list.
Category lists vary significantly by carrier
There is no industry-standard classification taxonomy for A/E professional liability insurance. Each carrier maintains its own list, and the lists vary in both structure and granularity.
A carrier focused heavily on the design professional market may use twenty or more specific categories — separating Healthcare into Acute Care, Medical Office, Long-Term Care, and Behavioral Health; splitting Residential into Single-Family Custom, Multi-Family High-Rise, Multi-Family Low-Rise, and Senior Living; and distinguishing between Transportation Infrastructure and Utility Infrastructure. The granularity reflects the carrier's ability to price different risk profiles within broad categories.
A carrier with a more general A/E portfolio may use eight to twelve broader categories — combining retail and commercial office, grouping most residential types together, and treating most infrastructure as a single category. The broader list is simpler to apply but provides less precision in the underwriter's risk assessment.
How to get the current category list
The carrier's renewal application form includes the category list — the table where the firm records gross billings, subconsultant costs, and net professional fees for each type. If the firm does not have a copy of its current carrier's renewal application, the broker can provide one.
When asking the broker for the category list, it is worth confirming whether the list changes from year to year. Some carriers update their classification structures periodically — adding categories to separate project types that were previously grouped, or combining categories that proved too granular to be useful. If the list changes, the E&O Category field in BaseBuilders should be updated to match.
Mapping the carrier's list to the firm's practice
Once the category list is in hand, the firm should map it against its actual project portfolio. This mapping has two purposes.
First, it identifies which categories the firm actually uses. A firm that does no residential work does not need a Residential category in its tagging system — but it should confirm that the underwriter's residential categories will always show zero rather than being left blank, which some underwriters interpret differently.
Second, it identifies the edge cases — project types that could reasonably fall into more than one category. These edge cases are where the annual categorization exercise produces the most inconsistency, and where the firm should establish explicit rules before the tagging system goes into use.
The carrier's category list is in the renewal application form.
Most firms fill it in at renewal without ever building a consistent tagging system that matches it.
Getting the list from the broker once and loading it into BaseBuilders as the project intake Select field — is the step that converts renewal from a categorization exercise to a report run.
Handling Edge Cases — The Projects That Don't Fit Cleanly
Most projects are easy to categorize. A hospital addition is Healthcare. A school classroom building is Educational. A commercial office building is Commercial Office. A single-family custom home is Residential.
The edge cases — the projects that could reasonably go in more than one category — are where categorization inconsistency lives. Establishing explicit rules for the most common edge cases before the tagging system goes live produces a consistent historical record that the underwriter can evaluate coherently.
Mixed-use projects
A mixed-use development with retail on the ground floor and residential apartments above is a genuinely ambiguous categorization. The project involves both commercial and residential design work, and the risk profiles of those two types differ.
Most carriers address this by asking the firm to split mixed-use projects across categories based on the proportional square footage or fee allocation of each use type. A mixed-use building that is 30% retail and 70% residential would allocate 30% of its net professional fees to Commercial and 70% to Residential.
Establish this rule before the first mixed-use project is tagged. Applying it consistently across all mixed-use projects produces a categorization that accurately reflects the firm's exposure in each category — and that the underwriter can verify against the project descriptions.
Renovation vs. new construction
Many carriers distinguish between renovation of occupied facilities and new construction, particularly in categories like Healthcare and Educational where occupied renovation carries meaningfully different risk characteristics than greenfield construction. A hospital expansion in an occupied building involves coordination with active clinical operations, infection control requirements, and phased construction management that a new freestanding medical office building does not.
If the carrier's list distinguishes between occupied renovation and new construction, the firm's tagging system should too. If the carrier uses a single category for both, the firm may want to maintain its own internal distinction even if it does not affect the renewal application — for the firm's own risk management awareness.
Government vs. institutional
Government work and institutional work are sometimes combined in a carrier's category list and sometimes separated. Government typically refers to work performed for government agencies — city halls, courthouses, fire stations, and public works facilities. Institutional typically refers to work for non-governmental institutions — universities, hospitals, museums, and religious organizations.
When the carrier separates the two, the firm's project managers need to understand the distinction clearly enough to apply it consistently. A county hospital is government-owned but healthcare in project type — does it go in Healthcare or Government? The answer depends on the carrier's classification logic, and the firm should confirm the ruling with the broker rather than making an assumption.
Infrastructure and site work
Civil engineers and landscape architects face particular categorization challenges because their work often involves project types that do not map cleanly onto a category list designed primarily for building design. A roadway improvement project, a stormwater management system, and a park master plan may all fall into an Infrastructure or Site Development category that was designed as a catch-all.
For these firms, the most important categorization discipline is ensuring that all projects land somewhere in the category list — even if some go into a broad "Other" or "Miscellaneous" category — rather than being omitted because the category fit is imperfect.
Projects spanning multiple categories
Occasionally a project involves distinct scopes of work that fall into different categories — a master plan for a campus that includes both educational buildings and housing, or a healthcare campus that includes both acute care and medical office components. These projects may warrant splitting across categories in the same way mixed-use projects do.
Establish the threshold for splitting: a secondary scope that represents less than 10% of the fee might be absorbed into the primary category rather than split; a secondary scope that represents more than 20% of the fee warrants its own category allocation. The specific threshold is less important than having one and applying it consistently.
→ Read: What Your E&O Underwriter Actually Asks For at Renewal
Edge cases — mixed-use projects, occupied renovation, government versus institutional — are where annual categorization produces the most inconsistency.
Establishing explicit rules before the tagging system goes live produces a historical record the underwriter can evaluate coherently. Document the rules once and apply them consistently.
Setting Up the Tagging System in BaseBuilders
The categorization system in BaseBuilders is built on a custom Select field on the project record. The setup is straightforward, and the ongoing effort is minimal — one field populated at project intake, taking thirty seconds per project.
Creating the Select field
In BaseBuilders, custom fields are added to the project record through the settings panel. Create a new Select field named "E&O Category" or whatever label makes the purpose clear to the people who will populate it during project setup.
Load the field with the underwriter's specific category list — each category as a separate option in the Select field. Include all categories from the carrier's renewal application, even those the firm does not currently use. A category that consistently shows zero is better than a blank that might be misinterpreted.
If the firm has documented edge case rules — how mixed-use projects are split, how occupied renovation is categorized, how government versus institutional is determined — those rules should be written down and accessible to project managers at intake. A brief reference document or a note in the project setup workflow is sufficient. The rules do not need to be elaborate; they need to be consistent.
Tagging projects at intake
When a new project is opened in BaseBuilders, the project manager assigns the E&O Category at the same time as other project setup fields — phase structure, fee allocation, team assignment. For a straightforward project, this takes thirty seconds. For an edge case, it may take a brief conversation with the principal to confirm the correct category.
The project manager who sets up the project is the right person to make the categorization decision — they know the project type, the client, and the scope. Waiting until renewal to categorize is waiting until the person with the least context about each project is making the decision.
Handling existing projects
For projects already active in BaseBuilders when the tagging system is established, a one-time retroactive tagging pass is needed. This involves reviewing the active and recently completed project list and assigning the appropriate E&O Category to each project.
For most firms, this retroactive pass covers the projects that will appear in the current and prior year's renewal application — the two to three years of data the underwriter typically requests. The pass takes a few hours for a firm with a moderate project portfolio and is typically done by the office manager or principal with knowledge of the firm's work.
Once the retroactive pass is complete and new projects are being tagged at intake, the categorization work is effectively zero going forward — one field, thirty seconds per project, done when the project is opened.
Running the renewal report
At renewal time, the user selects the reporting period date range in BaseBuilders and runs the E&O renewal report. The report summarizes all project activity within that date range by E&O Category — showing gross billings, subconsultant costs, and net professional fees for each category.
For three years of data, the report runs three times — once for each reporting period. The three exports are organized into the renewal application format and handed to the broker.
The broker has what they need to submit to the incumbent carrier — and to shop the risk competitively across the market if the firm chooses to go to market this renewal cycle.
→ Read: How to Set Up and Run Your E&O Renewal Report in BaseBuilders
→ Read: Project Management for A/E Firms
→ Read: R&D Tax Credit for A/E Firms
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