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Engineering Insurance

One Thing You Can't Live Without as an Engineer

Even the best laid plans can go awry. As an engineer, your job is multifaceted and can involve many different types of jobs. There are engineers who build skyscrapers and museums. There are engineers who design machinery and develop new mechanical innovations. There are engineers responsible for city layouts and overseeing public events. Using technology and science, engineers help solve society’s conundrums and work to make life easier, but mitigating the diverse range of risks can be tough. All engineers need insurance, but how do find a comprehensive program designed to meet your specific needs?

Engineering Facts

Engineering is a multifaceted field that is responsible for innovations in science, aerospace and our daily lives.

  • Engineers were responsible for the development of the snowboard.
  • Shoe companies hired engineers to design running shoes that provide comfort and performance.
  • Engineers are responsible for water slides, which need just the right amount of water coming down the slide for the optimal experience.
  • Engineers are responsible for space travel, ensuring that shuttles safely take off, travel the correct course and land at a specific place and time.
  • Bioengineers are responsible for new medical technology, making it possible for surgeons to better assist patients.
  • Engineers have also played an active role in the film industry, constructing special effects.
  • Engineers even design cartons, boxes and crates for every imaginable application.

Business Risks for Engineers

While all businesses have unique risks, the engineering field is a bit more complicated. Even within the profession, there are many different types of engineers who work on a vast number of projects.

If you manage an engineering operation, you need a comprehensive insurance policy that can mitigate your specific risks whether you’re assisting with a music festival or heading up a downtown revitalization. You can be held responsible for a number of issues that arise with an engineering project, but your insurance must also handle standard business risks.

It is important to work with an agent who can help evaluate the risks you face in your specific line of work and identify the types of coverage you need whether you and your crew are doing design and build projects, contracting to defense firms or working in the digital industry.

Standard Forms of Engineering Insurance

  • General liability insurance: If your client, employee or contractor claims that you or your employees caused bodily injury or property damage, this coverage pays compensation or legal defense costs. Typically, accusers make a claim first, but some may instantly resort to legal action.
  • Professional liability insurance: This coverage provides additional liability insurance for "errors and omissions" risks. For example, if the services you provide result in a loss or you give advice that results in a loss for a client, your professional liability coverage helps cover related claims.
  • Design insurance: Many engineers work purely in the design field and therefore require policies to insure against risks inherent to that phase of the process.
    • Design professional liability insurance: This protects you and your business from claims that your designs are somehow faulty.
    • Design liability insurance: This protects you and your business from claims that your designs caused personal injury or property damage.
    • Design build insurance: This is for the engineers who do it all — from designing the project to completing its construction — and protects you from claims that either your design or the construction caused a client or third party harm.
  • Workers' compensation: Although you may not be at high risk for on-site injuries, your employees who work to complete a project could be in danger. If an employee is injured while working, this policy assists with medical expenses and provides some lost wages depending on the policy. This also limits a worker’s right to sue you for negligence related to the injury.
  • Property insurance: If your office catches fire or you suffer a break-in, this policy pays for damage and replacements.
  • Equipment breakdown insurance: If you have equipment and computers that are vital to your operation, you can insure that property against breakdowns and malfunctions whether due to mechanical or electrical failure or employee error.
  • Business owner’s policy: A business owner policy, or BOP, may be a suitable option if your engineering firm runs a low-risk operation. Combining general liability insurance with property insurance, which protects your building and professional equipment, is a great way to save money and get comprehensive coverage.
  • Umbrella insurance: This is extra liability insurance that provides additional coverage above and beyond your general liability insurance policy.

Engineer Professional Liability Insurance

As an engineer, your professional liability risks are significant. It only takes a small mistake or error in judgment to throw off an entire project. A safety concern could be introduced by a change of building plans, or a delay by mismanagement and employee turnover.

"Errors and omissions insurance," or E & O, protects you against legal claims in a wide range of scenarios. For example:

  • You neglect to warn clients of potential problems with a project.
  • The services you provide inadvertently cause a business owner to make decisions that result in a loss.
  • You cut corners to meet a deadline, which results in needing repairs down the road and having to temporarily close operations.

A lawsuit is very expensive and can cause severe financial challenges for your business without the right protection. Engineer professional liability insurance covers your legal defense fees. If the court rules in the client’s favor, your insurance can also help to pay the settlement or judgment amount.

Remember, if you work in the design phase of engineering, there are design professional liability insurance policies developed specifically for your field. Be sure to work with an experienced insurance agent who will ask you the right questions and match you with the appropriate policy recommendations.

You should also be aware of what your coverage limits are and how they work in specific situations. For example, if the settlement amount is $2 million but you only have $1 million of liability insurance, you’re responsible for the remaining $1 million. Some client contracts will specify a desired amount of insurance. You may also want to consider business umbrella insurance for additional liability protection.

Compare Affordable Engineering Insurance Quotes

From engineer professional liability insurance, to property and equipment coverage, to workers' compensation and design insurance protection, you have some insurance requirements as an engineer depending on the size of your firm and your projects. You may need help evaluating what coverage works best for your needs and risks. Financial advisers, legal professionals and insurance agents can help you understand what coverage you need and what risks you face in your line of work.

Researching the right insurance company to work with might take a little time, but comparing quotes for coverage is well worth your effort. Once you understand what coverage you need, matching up with the right agent and the right policy will be easy.

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