The Professional Liability Insurance Requirements for Engineers

Posted on: May 4, 2023 by Huntersure LLC.

Every trade has professional liability insurance requirements, and engineers are no different as they attempt to excel. Professional engineers not only create and build projects, but they must also build their reputation. Establishing a business comes with dedication, hard work, and risk. That often leads to asking, “Are engineers required to carry professional liability insurance?”

Professional Liability Insurance Risks for Engineers

Although professional engineering firms, small and large, follow a strict ethics code, every project has nuances that create various potential risks. One miscalculation, miscommunication, or purchasing error could pave the way for a lawsuit or other damages. Professional liability coverage ensures that even the slightest mistake will not lead to a business failing.

From a design error by an electrical engineer to a virus-vulnerable software program or wrong direction from a civil engineer, engineers retain liability for any professional wrongdoings on a project. Those errors may result in safety concerns or financial losses, leading to a disgruntled client who may be ready to sue. Even if the mistake were not the engineering firm’s fault, one would still need time and money for a defense case.

Professional Liability Insurance Benefits

Engineers who obtain professional liability coverage receive financial protection from a lawsuit. Along with filing a suit over errors in the project, a client may sue if the project took too long to complete. Likewise, they may file a claim if a mismanagement error results in potential problems. Liability insurance protects firms from costly legal proceedings and typically covers lawyer fees, legal expenses, judgment liens, and settlements. 

Supplemental Insurance for Engineers

While professional liability insurance covers professional wrongdoings, it does not provide blanket coverage for an engineering company. Regardless of the industry, any business owner should obtain comprehensive coverage to cover the unexpected situations that eventually arise. Obtaining general liability insurance covers:

  • Bodily injury, such as a slip-and-fall incident
  • Personal injury, such as slander
  • Property damage, such as breaking someone’s equipment

Adding Coverage

While some work solo, most have a few employees to keep the business going. That means getting workers’ compensation insurance, which benefits an injured employee to cover medical bills, lost wages, and injury-related therapy or surgery.

Whether engineers own or rent a property, commercial property insurance should also be a part of the insurance portfolio. Especially in engineering, the latest technology, equipment, and other assets are vital to completing a project. This insurance covers various losses associated with the damaged property from weather events, vandalism, and theft, including inventory, equipment, fixture, and furniture.

Besides protecting physical assets, engineering professionals also need to protect the company. Business interruption insurance covers the costs associated with unexpected events. If a massive storm requires months of repairs, this policy helps cover the costs of lost income. Also, it helps with lease or rent payments. The policy also helps with taxes, employee wages, and loan payments. 

While there are many reasons why engineers need professional liability insurance, cost always comes into play. Luckily, they do not have to settle for one-size-fits-all coverage. When determining coverage, firms should figure in expected sales, the company’s size, and if they offer specialty services.

About Huntersure

Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.

Posted in: Professional Liability Professional Liability Insurance