Excess Liability

Why Engineers And Architects Should Carry Excess Liability Insurance

Although all reputable firms carry liability insurance that covers business assets, management decisions, and employee activities, it is still a wise precaution for engineers and architects to have personal excess liability coverage. A lawsuit can involve personal as well as professional liability and might result in massive financial penalties.

Design professionals are responsible for the functionality and safety of construction projects from first to last. Although their oversight will not extend to the performance of all the contractors, sub-contractors, and specialized service personnel, their responsibility is not limited. This is why any dispute may draw them in as principals and why personal liability is a potential problem.

A suit for damages can have catastrophic consequences for an under-insured company and can negatively impact the designers as well. All assets will be at risk, of course, but there is more than can be ruined, such as professional reputations and future prospects. Litigation can tie up a business so normal operation is interrupted, with consequent loss of income. This can mean long-term financial stress even if the suit does not result in a judgement.

Bankruptcy can protect the assets of a business but it may not cover personal liability for all employed or independent designers involved with the project in question. Extra coverage can mean the difference between crippling financial loss and having the means to satisfy any claims. Many professionals do not consider personal risk when going about their professional duties, but past litigation shows that the risk is very real. It used to be that a million dollar policy was sufficient, but these days large settlements are becoming increasingly common.

The internet is a good source for information on this topic. Much of it is open to all who visit pertinent sites, where tips and FAQs offer background information to searchers. Customer service representatives are standing ready to answer questions you may have. To take things a step further, you can arrange a no-obligation consultation with an agent skilled in your particular field.

Risk management is a part of any business, especially one which depends on site analysis, structural design, and innovation. Engineering and architecture involve risks specific to the industry. An excess liability specialist will understand those particular dangers and will be able to explain the total picture of insurance coverage. As a cost of doing business, all expenses for insurance are legitimate tax deductions.