Engineers Insurance is Vital to Your Risk Management Strategy
Even the best professional engineers can sometimes commit inadvertent errors and miscalculations in the process of completing a project. Unfortunately, even a small mistake can have serious consequences later on. This is why it is vital for engineers to have a risk management strategy to help them identify and avoid potential risks. Engineers insurance is a vital part of any risk management strategy, since you pass part of the risk of an accidental mistake on to the insurance company. There are two major types of coverage: engineering professional liability insurance and engineering general liability insurance.
Engineering professional liability insurance is also known as errors and omissions (E & O) insurance or malpractice insurance and provides coverage in case a lawsuit is brought against you or your company alleging errors, omissions or acts of negligence in the performance of your professional responsibilities. E & O insurance would cover your legal defense costs as well as any damages the court may require you to pay if you lose the case, up to the limit specified in your policy for all covered claims. This ensures that your business can continue operating while you’re defending the lawsuit in the courts, while protecting you from catastrophic losses in case of a ruling against you. The policy covers all projects completed while the policy is in effect, even after it has been renewed, but not projects that you did before you took out the plan. However, some insurers now offer prior acts coverage that would cover even work done before the inception date of your current policy.
Every job that an engineer takes on involves a different set of risks and the coverage of their engineers insurance policy should reflect them. However, the standard features your policy should have include coverage for suits filed against an engineer from any place in the world, reimbursement of expenses incurred to help reduce or avoid a claim and coverage for punitive and exemplary damages. Other coverage features in your policy should reflect the specialization of your firm as well as the type of projects you accept.