As an engineer, you often provide clients with advice and apply your professional expertise to projects. This creates a unique set of risks, as an innocent mistake or misunderstanding between you and client could result in a liability claim. This is where Professional Liability insurance could help.
Let’s take a closer look at five things engineers should know about Professional Liability insurance.
1. What is Professional Liability insurance?
If you’re just establishing your engineering career, you may not be aware of how other engineers protect themselves on the job. We’re talking about more than just hard hats and steel toe boots—engineering insurance designed for your unique occupation can provide another layer of protection. Professional Liability insurance is one policy that does this, but what is it?
Also known as Errors and Omissions (E&O) insurance, this type of policy protects your business against claims of negligence, misrepresentations, or mistakes. Professional Liability claims are typically made by clients who allege some form of financial damage as a result of your services, products or employees.
Professional Liability insurance helps shield you from certain liability claims that may arise from your work, including:
- Errors and Mistakes
- Missed deadlines
- Undelivered services
- Breach of contract
2. What does Professional Liability insurance cover?
Professional Liability insurance can help protect you against omissions, negligence, and other forms of liability claims. Your policy does this by paying legal expenses resulting from claims, including:
- Attorney’s fees
- Miscellaneous court costs
Liability lawsuits are often expensive, particularly if they take months or years to resolve. This can be potentially devastating for any small business. Legal bills can quickly stretch budgets to the breaking point, and unfortunately have led to business closures and damaging personal savings as well. Professional Liability insurance removes this burden from your shoulders, so you’re not left paying these bills out of your own pocket.
3. Is Professional Liability insurance required by law?
Many states legally require different types of engineers to have Professional Liability insurance. A policy may be necessary to become licensed and work in certain states. Additionally, professional associations may require their members to hold minimum levels of Professional Liability insurance. Information about the legal insurance requirements for engineers in your area can be found on your state government or professional association’s website.
Even if you are not required to hold Professional Liability insurance by law or your professional association, your clients may expect you to have a policy to work with them. This requirement is often specified in business contracts. You might be asked to provide proof of insurance before beginning work on the client’s project.
4. Does my policy cover all my business activities?
Professional Liability insurance covers many important aspects of an engineer’s job. However, it may not be the only type of engineering insurance that you consider. Depending on how and where you work, other forms of coverage might also be appropriate:
- General Liability protects businesses against the risk of customer injury and property damage. Engineers often consider these policies if they regularly work on-site or meet with clients in their offices.
- Workers’ Compensation provides protection for employers if an employee suffers a work-related illness or injury. You may be required to have this type of policy to work as a sole proprietor in some states or if you hire any employees.
- Business Owner’s Policy is a combination of policies, combining covers such as General Liability insurance and business personal property coverage, to help protect small businesses from costly interruptions to service.
When taking out any form of engineering insurance, it’s important to correctly describe your business activities when you apply. This helps ensure that your policies will cover the unique risks that you face while on the job.
Similarly, it’s important to notify your insurer if there have been any changes to your business. The engineering insurance you purchased at the start of your career may need to updated when certain events occur, such as taking on more or larger contracts.
5. Where can I find Professional Liability and other engineering insurance?
There are many insurers who provide Professional Liability and other engineering insurance to engineers across the country. However, comparing policies to find the best ones to protect you and your business is often a time-consuming process.
BizInsure has simplified finding insurance, saving you time that could be better spent focusing on your work. Compare multiple engineering insurance policies from multiple insurers at the same time, then simply click to buy! You’ll even receive your proof of insurance instantly by email. And with greater pricing transparency, you may even save money on your next Professional Liability policy.
Learn more about engineering insurance and receive free quotes today.