Engineers must get it right one hundred percent of the time. If they fail, human lives, buildings, bridges, and other critical assets could be at risk.
Still, even the most careful and by the book engineers and engineering firms make mistakes. These mistakes — whether the result of a bad design, faulty materials, or human error — often result in costly lawsuits.
The best way for engineers to protect against lawsuits is to get professional liability insurance, which can help cover legal, defense, and settlement costs if an engineer or engineering firm is ever sued.
In this article I’ll explain everything engineers and engineering firms need to know to get the right professional liability protection to meet their needs and reveal the 6 best professional insurers for engineers.
- The 6 best professional liability insurers for engineers
- What is professional liability insurance for engineers?
- What does engineering professional liability insurance cover?
- How does professional liability insurance for engineers work?
- What other types of insurance do engineers need?
- How much does professional liability insurance for engineers cost?
The 6 best professional liability insurers for engineers
- CoverWallet: Best for engineers who want to compare coverages and premium costs
- Hiscox: Best for engineers with unique insurance needs
- biBerk: Best for low-cost engineer professional liability coverage
- The Hartford: Best for engineers looking for a sound and ethical insurer
- Progressive: The best overall provider of engineer professional liability insurance
- Chubb: Best for engineers who prefer to purchase packaged insurance solutions
CoverWallet: Best for engineers who want to compare coverages and premium costs
Looking for an easy way to compare professional liability protection for your engineering business quickly and easily? CoverWallet can help you do just that!
CoverWallet is a cutting-edge insurance provider. The firm has developed its own state-of-the-art platform, based on its proprietary algorithms, to ensure it is able to connect engineers and engineering firms with all the business insurance they need, including professional liability coverage, at a fair price.
CoverWallet’s experts have used their extensive experience to make sure you only have to input the information needed to generate quick and accurate quotes. The entire process should take less than ten minutes.
You can feel confident knowing that CoverWallet is a part of Aon, an established company that provides advice to businesses on things like risk, health, and retirement.
Once you get your quote, CoverWallet makes it easy to purchase a professional liability policy or complete business insurance package online or through an agent. When you get your professional liability policy through CoverWallet, it’s simple to manage your coverage online, including downloading a certificate of insurance, filing a claim, renewing your policy, and more.
Hiscox: Best for engineers with unique insurance needs
Hiscox offers a complete array of business coverages and is a leading insurer that specializes in small business insurance.
Hiscox makes it easy to purchase all types of business insurance online, including professional liability coverage. You can also speak with experienced business insurance experts who can help you customize your coverage to meet your unique company needs. Hiscox also offers top tier service, provides fast quotes, instant coverage, and quick claims processing.
If you choose Hiscox for your business coverage, you can rest assured knowing you’re entrusting your engineering business to a firm that’s been in operation since 1901. More than 400,000 companies choose Hiscox for their coverage.
The Hiscox application requires information some engineering related information, but it is relatively short and fast. Within 5-10 minutes, you will get a quote similar to the below. This quote is for an electrical engineer in Los Angeles, CA working primarily in residential projects, with annual revenue of $400,000 and the biggest project’s revenue of $85,000.
biBerk: Best for low-cost engineer professional liability coverage
After the last few years, few engineers are sitting on extra cash to spend on insurance. If that’s the case with your business, biBerk could be the ideal insurer for you.
biBerk is a low-cost business insurance provider. Despite saving money on your engineer professional liability coverage, you can rest assured knowing you’re still getting quality protection for the business you’ve worked so hard to build. biBERK is able to lower insurance costs by almost 20 percent because it insures small businesses directly, without the added expense of having to work through a middleman or insurance broker.
You can feel confident knowing biBerk is a part of Berkshire Hathaway, a company headed by well-known investor Warren Buffett. It’s a firm that has millions of satisfied customers that’s been insuring businesses for more than 75 years.
Similar to Hiscox, the biBerk application requires information that I am unable to provide.
The Hartford: Best for engineers looking for a sound and ethical insurer
The Hartford is one of the oldest companies of any kind in the United States. It’s offered insurance solutions for more than 200 years and has helped one million plus businesses with their insurance needs. The company takes pride in the fact that the Ethisphere Institute named The Hartford a World’s Most Ethical Company twelve times. The Hartford’s longevity and focus on ethical business practices makes it a company that you can feel good about doing business with.
The Hartford’s dedicated and highly experienced small business team is available to help company owners explore their business liability and other commercial insurance options. If you decide to purchase insurance from The Hartford, you can rest assured knowing you’re entrusting your business to a strong, stable, knowledgeable, and ethical provider.
Progressive: The best overall provider of engineer professional liability insurance
Progressive may seem like a less than serious company because of its ongoing series of commercials featuring Flo. You might feel concerned about entrusting your business to the insurer.
The truth: It’s a reputable company that’s been offered insurance for more than 80 years and is a top insurer in the United States. The company is known for its flexibility, great rates, and top-tier service.
Progressive is famous for its discounts, which could help you save on your professional liability insurance. Some discounts you could earn include ones for having multiple business policies with Progressive and paying for your insurance annually rather than incrementally.
Chubb: Best for engineers who prefer to purchase packaged insurance solutions
Chubb is the largest publicly traded property and casualty insurance company in the world.
Chubb focuses on understanding the unique risks of businesses in different industries including engineers. That means your business professional liability coverage can be combined with other coverages (Chubb has more than 30 of them) to protect against most of the risks you face.
Because the experts at Chubb have such a deep understanding of the risks faced by engineers, they have programs — and are able to offer advice — on how to reduce risks in the workplace. Not only is lowering risk levels the right thing to do, it can help reduce professional liability and other business insurance costs.
What is professional liability insurance for engineers?
Even if you’re the absolute best at what you do, engineers make mistakes and unintentional errors. If a client believes a mistake or error committed by you or an employee while providing engineering services to them resulted in a financial loss or other harm, they can sue you.
Professional liability insurance helps cover you and your engineering business if you or someone who works for you makes a mistake when providing professional services that has a negative impact on a person you provide the services to. This coverage is also known as:
- Professional indemnity insurance for engineers
- Errors and omissions insurance for professional engineers
- E&O insurance for engineers.
If you don’t have professional liability coverage and are sued, you are responsible for paying legal and settlement costs out of pocket. In most cases, these can be high enough to bankrupt an engineer or engineering business.
What does engineering professional liability insurance cover?
Professional liability insurance helps cover claims related to things like:
- Mistakes or negligence. Services provided (or not provided) by your company that aren’t what the client expects and result in a lawsuit or judgment against your business.
- Misrepresentation. This includes making claims to clients or saying things to them that aren’t completely true.
- Inaccurate or incorrect advice. Providing advice or direction to a client that causes them harm.
- Copyright infringement. This includes copyright law issues, mistakes, oversights, and misunderstandings.
- Personal injury. This encompasses all types of physical harm caused by services provided by you or the people who work for you.
If your engineering business gets sued, this coverage can help pay for your:
- Legal costs
- Defense fees
Even if you don’t do anything wrong, a client is still able to sue your business if they think you made a mistake or did not provide adequate engineering services. Without professional liability insurance, you will have to pay the costs to legally defend yourself out of pocket, even if you’re found innocent. Costs related to these kinds of lawsuits are typically high, even if you did absolutely nothing wrong.
Here are some scenarios that professional liability insurance can help with:
- A building was built incorrectly because you used wrong dimensions in your design for it.
- Your client’s storage building collapsed because of your firm’s design and destroyed all their inventory.
- An engineer who works for you provides inaccurate advice because they did not fully inspect a property before construction.
In each case, the business is sued for the mistake they made.
Professional liability insurance doesn’t cover everything related to business mistakes. It won’t cover the following types of claims:
- Bodily injury or property damage: You’ll need to get a Business Owners Policy (BOP) with general liability insurance to help cover costs if someone is injured on your business premises and the injury is not specifically related to the engineering services your operation provides or you or an employee damages someone else’s property while conducting business. Learn more at the best BOP insurance companies and the best general liability insurance companies.
- Work-related injuries or illnesses: If your employees get hurt or sick for reasons related to their jobs, it will be covered by your workers’ compensation insurance. This insurance is required for most businesses and pays expenses related to helping them recover and return to work. Learn more at the best workers comp insurance companies and the cheapest workers comp insurance companies.
- Data breach: If a cyber criminal steals or compromises confidential or sensitive online information about your clients, customers, and employees, the costs related to informing the impacted parties and making them whole will be covered by cybersecurity insurance. Learn more at the best data breach insurance companies.
How does professional liability insurance for engineers work?
Professional liability insurance has an added layer of complexity that many other business-related policies don’t have.
Typical business insurance only covers claims when the policies are in effect. Most professional liability policies are based on when claims are made with a retroactive date and extended reporting period.
- The retroactive date means the policy holder is covered for incidents that happen on or after a specified date.
- The extended reporting period covers claims filed during a specified time after the policy expires. This is usually a 30 to 60 day period, but it can be extended to a year or more for an additional cost.
An insurance company will actually cover claims made against a business during the period the engineer professional liability policy is effective, or within its retroactive date or extended reporting period. Other than this, you should contact your insurance provider as you would for any other type of insurance when you need to make a claim.
What other types of insurance do engineers need?
Professional liability insurance for engineers doesn’t cover everything. You’ll need to purchase other types of insurance to get complete coverage for your engineering business. Some types of coverage engineers typically get include:
- General liability insurance to help protect your business from claims that it caused:
- Damage to someone else’s property or belongings
- Injuries that happen to clients on your business property.
- Workers’ compensation insurance, which helps your employees recover from work related injuries or illnesses. This coverage provides benefits that can help pay for:
- Medical bills
- Ongoing care costs, including surgery or physical therapy
- Lost wages
- Death benefits to immediate family members in case an employee passes away due to an on the job incident.
- Commercial property insurance, which helps protect your owned or rented buildings and other property used to operate your engineering business. This includes:
- Business equipment
- Office furniture
- And more.
- Commercial auto insurance will protect you and your employees when you drive a company owned or personal vehicle for work reasons. Personal auto coverage will not pay for accident damage if you’re driving for work purposes. Learn more at the best commercial auto insurance companies.
How much does professional liability insurance for engineers cost?
Every engineering business is unique, so the professional liability insurance cost for them varies. Coverage typically ranges between $150 and $6,00 a year per engineer, but your premium cost depends on different factors, including:
- Coverage limits
- Deductible amount
- Years in business
- Claims history
What’s important is that you get quotes from several of the insurers on our list so you can compare coverages and prices to find the best combination for you and your engineering operation.
Do engineers and architects have the same professional liability insurance?
Both engineers and architects need professional liability insurance to protect them from mistakes, errors, and omissions they may have in their work. Some engineers have similar risk exposure as architects, especially electrical engineers who work in construction projects. However, there are many other engineering types such as civil, chemistry, software engineers, just to name a few. These engineers are exposed to a very different risk profile from architects.
Professional liability insurance protects will provide the same coverages for errors and omissions that engineers or architects might have in their work. However, different professions will have their own nuances in their line of work, which leads to differences in their coverages. And since the risk exposure is different, the cost of professional liability insurance policies will be different for different professions.
Learn more at the best professional liability insurance for architects.