What Coverage Should Engineers Look for in Professional Liability Insurance?

March 7, 2023

Engineers work on various projects, and the risks involved are often unique to each one. This is why engineering firms should partner with an agent who can evaluate risk and match it with the right insurance carrier.

Professional liability insurance protects engineers from claims against them for errors, omissions and other professional mistakes. It also covers costs associated with defending against such claims.

Errors & Omissions Coverage

E&O or professional liability insurance protects you and your business against claims of errors or omissions from clients. The coverage usually covers legal costs and settlements up to the amount specified in your contract.

The cost of E&O insurance depends on your industry, revenue and projected risk. Getting quotes from several companies to compare costs and coverage details is important. Many professional service firms need to deliver expected work or provide accurate guidance. These mistakes can cause client losses, significantly if the error impacts the customer’s business goals and bottom line. In these situations, your clients can sue for financial loss due to a lack of reasonable standards or inadequate services. This can leave you with expensive legal costs, settlements, and disciplinary hearings from licensing boards or other organizations.

General Liability Coverage

According to legal experts, professional liability insurance for engineers protects them against the costs of lawsuits. It can cover legal defense fees and settlement or judgment amounts if a client sues you. Engineers often work with clients to design projects that involve significant property or financial losses. This can result in a claim by the client alleging that you were negligent and failed to complete your job correctly. The cost of a professional engineering liability policy can vary, depending on several factors. Your agent will help you determine your coverage needs and find an affordable solution that suits your business.

Business Owner’s Policy (BOP)

If you’re looking for a convenient and versatile business insurance policy, you may want to consider a Business Owner’s Policy (BOP). BOPs are popular with many small businesses because they include several important coverages in one easy-to-manage package. A BOP can help cover a wide range of risks that a typical business may encounter, including general liability claims, property damage and loss, and business interruption costs. Additionally, BOPs often contain additional endorsements that can be tailored to your specific needs and situation. The cost of a BOP depends on your industry, location, number of employees and other factors. A higher-risk business generally pays more for its BOP than a lower-risk business.

Umbrella Coverage

If you design a bridge with a flaw that leads to a collapse or design a product for a company that causes damage and injury, your professional liability insurance can cover those costs. It’s important to note that your professional liability coverage is not a standard insurance policy, so you should talk to an independent insurance agent about the conditions and limitations of this coverage. Architects and engineers are human, so mistakes happen. Whether misrepresenting your services, failing to call a specialist, misunderstanding, or breaking building codes, your mistakes can land you in court. Sufficient insurance for any lawsuits you might get involved in can save your engineering business from financial ruin. Umbrella policies plug holes in your existing insurance, providing additional protection that kicks in when your primary coverage is exhausted or unavailable.

Emiy Watson

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