E&O Insurance for Engineers

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Get Ahead with Engineering E&O Insurance for Engineers

Whether your engineering firm is a startup or you are an established consultant engineer, the Engineering E&O insurance for engineers is important. The E & O insurance not only helps you differentiate your business from other uninsured competitors but enables you to project your business as responsible and trustworthy.

Many clients also require that your engineering firm have an E&O policy before hiring you. It gives them the reassurance that they can recover their losses in case the project does not meet with their expectations.

The Errors and Omissions engineering insurance is formulated to protect engineers if there is a professional error or omission resulting in property damage, financial loss, or injury to their clients.

What does E&O stand for in insurance?

E & O denotes errors and omissions that are inevitable in all professions across industries. As an engineer, if you make a minor or major mistake related to design, budget estimation, selection of materials or project specifications, it can cause disastrous results such as property damage and at times, loss of lives.

Errors And Omissions insurance for professional engineers covers you in case your client accuses you of errors and omissions.

Protect Your Engineering Business Today.

Do I need engineering E&O  insurance?

Businesses and independent consultants who offer professional services such as engineers and engineering firms typically need errors and omissions insurance for professional engineers  given the multiple risks that they face. A client can hold you or your firm liable for alleged or actual:

  • Breach of contract
  • Providing substandard work
  • Work oversights
  • Missed deadlines
  • Project delays
  • Overshooting the budget
  • Negligence
  • Use of wrong materials

In many cases, even if the engineer or engineering firm has provided good quality work, a dissatisfied or difficult client can file a E & O claim over a minor perceived problem.

As leading insurance providers, we at Engineers Insured have also seen that one of the most common drivers of engineering E&O insurance for engineers is that there is a mismatch of expectations between the client and the engineering professional. This could arise due to a lack of documentation with project owners and contractors, specifically when changes are made to the finalized design or other project specifications. In these cases, it is possible for you to prove that you had not done anything wrong and win the lawsuit.

However, when you do not have E & O insurance, you would have to incur out-of-pocket expenses related to court costs and attorney fees. Without the right E&O insurance, these claims result in major financial difficulty, not to mention the damage to reputation of your business.

A recent survey shows there is an upswing related to claims on errors and omissions insurance for professional engineers. While there is an increase in higher value engineering projects, the survey report also states that the awards handed down by juries are getting larger and larger.

The report found that E & O claims were the highest in specific engineering disciplines such as structural engineering, geotechnical engineering, mechanical engineering, civil engineering, architecture, and design engineering. Many of the claims are typically centered around major or minor infrastructure, geotechnical and residential projects such as high-rise condominiums, single family housing and apartment buildings.

For instance, a lawsuit was filed recently by a Residential Owners Association claiming damages for multiple construction defects in a $1.5 million project. Subsequently the association also terminated the contract with the engineer citing construction and design defects such as use of unsuitable materials for the coastal environment.

With new materials, technology and processes flooding the industry, there is also a growing concern over emerging, new risks that engineers face. These concerns include new project delivery methods of public-private partnerships and design-build projects, new construction methods and sustainable materials, cybersecurity and the use of AI and other smart technology.

Engineering firms and professionals incur both direct and indirect costs as a result of these lawsuits:

The direct costs include

  • Expenses related to hiring an attorney
  • Judgement and settlement costs
  • Deductible on the insurance policy

Indirect costs can include:

  • Loss of contract/ account
  • Loss of service time and productive sales
  • Damage to reputation and impact on morale
  • Damage to the firm’s operation
  • Out of pocket expenses for claims not covered by an insurance policy
  • Cost of replacing the lost contract or account

In a competitive marketplace, protecting your engineering firm’s financial health or business is of paramount importance. The engineering E & O  insurance for engineers is a custom made insurance policy that protects you against financial loss as a result of E & O claims.

What is the difference between engineering E&O insurance and professional liability insurance?

E & O insurance is also known as professional liability insurance and ‘malpractice insurance.’ While malpractice insurance is generally the term used in healthcare and legal sectors, the term ‘professional liability insurance’ is used for consultants, accountants and architects. E & O insurance is the preferred term in the IT and real estate industry.

Why choose Engineers Insured for E & O insurance?

With years of experience in the insurance segment, Engineers Insured offers you insurance products that precisely match your business and professional needs. Our E & O insurance offers holistic coverage of different claims that arise as a result of your professional services and offer both standard and optional additional coverages for:

  • Pollution Liability
  • Privacy liability
  • Technology Based Services
  • Computer Network Security
  • electronic data transfer
  • copyright infringement
  • Cybersecurity
  • General liability

Speak to our engineering E&O insurance for engineers experts today to get a competitive quote.