Professional Liability Insurance
for Architects, Engineers, and Design Professionals
Professional Liability Insurance helps protect engineers, architects, and design professionals from the cost of a lawsuit when a client is dissatisfied with their work, a project is delayed, or other problems arise.
As an architect or engineer, you know that you can’t plan for every contingency. Projects get delayed, problems creep up, and sometimes you go over budget. One of the key features of Professional Liability Insurance is that it can protect your business in the event that one of these issues leads to a full-fledged lawsuit.
In addition to its ability to offer financial security, Professional Liability Insurance is often a requirement. Before clients hire you, they may want to see your Professional Liability Insurance Certificate. This assures them that your business is financially strong enough to withstand a worst-case scenario. If something goes wrong and your client needs to sue to recover losses, an insurer can cover the bill.
Professional Liability Insurance (sometimes also called Errors and Omissions Insurance) puts everyone’s mind at ease. Here’s how it works.
Part 1: How Professional Liability Insurance for Engineers and Architects Works
Professional Liability Insurance: Protecting Architects, Engineers, and Design Professionals from the Fallout from Professional Mistakes
Professional Liability Insurance protects your business in the event that a client alleges your mistake (or an employee's) caused them financial loss. These mishaps can take on many forms, including…
- Unfulfilled Promises. For example: If your interior design firm miscalculates how long it will take to finish a project and the client sues because they can't move back into their home as previously planned.
- Carelessness. For example: A client builds a house according to your plans, and blames the design for their water damage and mold problem.
- Was poorly executed or simply wrong. For example: A drainage system proves to be inadequate and the client sues.
- Forgot to do something. For example: Your client requested specific finishes, but your employee forgot and installed the wrong ones.
Professional Liability Insurance can help pay for lawsuit-related costs, even if the lawsuit turns out to be unfounded. It's not uncommon in the design business to find clients who attempt to sue design professionals in order to recoup losses on a project. Professional Liability coverage can help you avoid wasting time and money.
Part 2. Key Details about Professional Liability Insurance for Engineers and Architects
Architects, Engineers, & Design Professionals: Key Details about Your Professional Liability Insurance
Professional Liability Insurance can be customized to suit the individual needs of your architectural, engineering, or design firm. Before you add this type of coverage to your business insurance plan, though, take a look at these important questions:
What Is "Claims-Made" Coverage?
Most Professional Liability plans offer "claims-made" coverage. This means that your policy must be in place both when an incident occurs and when you file your claim.
Some startup and small-business owners only realize this important caveat once they cancel coverage and try to submit a claim. For most architectural, engineering, or design firms, it's not a good idea to only carry Professional Liability Insurance when you are under contract – it's best to carry it for the entire life of your business.
Sometimes – if you must cancel your policy – you can replace it with a basic plan that offers limited coverage. For the stated amount of time, these policies still allow you to make claims on a previously reported incident.
What Are Your Professional Liability Coverage Limits and Deductibles?
Your coverage limit is the maximum amount your policy will pay in the event of a Professional Liability claim. Generally, Professional Liability Insurance is sold in increments of $1 million. A deductible is the amount you must pay out of pocket before your business can receive benefits from your policy. Per claim, deductibles can be as low as $1,000 or as high as $25,000, depending on the needs of your business and the specifications of the policy.
What If You Have Trouble Securing Professional Liability Coverage?
Sometimes it's difficult for startups and small businesses to find an insurance provider to offer them Professional Liability Insurance coverage, either because its individual risks are great or simply because owning a startup or small business is characteristically risky. But Insureon has longstanding relationships with some of the nation’s top-rated small business insurance providers. Often, Insureon can get you coverage when others can't.
Part 3. Customizing Professional Liability Insurance for Engineers and Architects
Architects, Engineers, and Design Professionals: Get Professional Liability Insurance That’s Made for You
When you're ready to add Professional Liability Insurance to your business insurance plan, contact an Insureon agent who specializes in the needs of architects, engineers, and design professionals. He or she can help you find a policy that meets the unique needs of your firm.