Professional Liability Insurance Cost for Engineers

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An engineering insurance helps engineers and engineering firms alike by protecting your interests should you fail to meet your client’s expectations.

There are innumerable things that could go wrong with your work as an engineer if you aren’t careful. Sometimes, even if you’re being careful, you still can’t prevent delays and setbacks. Unexpected rain could delay your construction project, or the unavailability of a certain important material can leave you scrambling for a replacement.

If even your employee makes a mistake, such as an error in design that costs the client both time and money, they can sue you. Here, a professional liability insurance for engineers can come to your rescue by keeping your finances secure through the whole litigation process. As your insurance carrier will provide all payments and compensation, you can continue to focus on your work as a professional.

Even if you try to deliver the best service you can, you may eventually run into a client you don’t agree with. If they feel that your professional services don’t match what they paid you for, then your professional liability insurance will protect you from having to pay your client the damages yourself.

Is Professional Liability Insurance Required for Engineers?

Along with a general liability insurance, all engineers whether they work in an organization or are independent contractors, should get professional liability insurance.

Aside from protecting your finances, you could miss out on other opportunities to grow and expand your business if you aren’t insured. If you want to get a loan and approach an investor, then they will likely ask for your insurance documents. Your professional liability insurance is a key piece of information. It shows that an insurance company assessed your professional past and present, and decided that you can get insured under their policy. This tells the lender that they too can invest in you.

Another example for when professional liability insurance becomes a requirement for engineers is if you collaborate with other companies or contractors. Even if you’re operating in the role of an engineering consultant, you can still be sued for giving wrong information or incorrect advice.

If you’re an engineering consultant and the company you’re working for gets sued over your advice, then that can hit your finances badly. Since you aren’t insured with the company, any legal costs and settlements you’ll have to pay is out of your own pocket.

A professional liability insurance can help both engineering companies and independent contractors by protecting their finances through any legal scenario involving work.

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How Much is Professional Liability Insurance for Engineer?

There is no one fixed price that applies to every engineer who wants to get a professional liability insurance. This is because companies and individuals who are deemed to be of higher risk also need to pay higher premiums. If you pay higher premiums, then your coverage is greater as well. That’s why you may not always want to reduce costs related to insurance premiums, but there are ways to make your business present lower risk if you do.

There are three main areas that an insurance a carrier will look at to determine what premium you should pay:

  • Size of Business: For individuals, this step poses no challenge. But larger engineering firms are likely to find that they are seen as high risk by their insurance carrier. Larger organizations that employ more people are always seen as high risk, as any of the many employees can make a mistake and get sued. More employees also implies that there are increased chances for your engineering company to get sued if multiple people make mistakes. Keeping this in mind, premium for larger organizations are greater.
  • Sales: If you’re doing good business, you’re a high risk policyholder for insurance carriers. Again, the logic here is the same as with the number of employees. If you do more business, then more people are enjoying your products and services. This increases the pool of people who are likely to sue you. Since more people use your services, you’re more likely to get sued than someone with a few clients.
  • Services Offered: The kind of services you offer as an engineer will also be just as important in helping fix your premium amount. Work where you’re more likely to make a mistake that can cause property or physical damage is high risk and vice versa.

When you get professional liability insurance, you’re protected should anyone – a client or a third party – sue you. The insurance carrier will pay both the cost of your Court proceedings as well as settlements and claims.

To reduce the cost of your premium, you can reduce the number of employees you hire, as well as focus your services around specialized engineering services. Remember that the more services you offer, the more likely you are to be seen as a high risk policyholder.

Engineers Insure is an insurance provider for engineers and engineering companies. Get yourself a professional liability insurance today and make sure that your finances are always secure, even when you get sued.