TLTR: This article explores what coverage options an engineer can choose in their line of work. See what the insurance policy offers not just for individuals, but also for businesses and firms.
Engineer insurance is beneficial for professionals who breathe life into projects that help develop society. Their job always demands innovation, and with innovation comes risks. Whether it is a large or small project, the potential dangers cannot be overlooked.
Thus, engineer insurance is an essential defense against possible hazards for independent engineers or small engineering businesses. There are many different types of engineering businesses; hence insurance companies have different policies to cover the risks.
Who Needs Engineer Insurance?
The following careers require professional engineer insurance:
- Civil Engineer
- Mechanical Engineer
- Electrical Engineer
- Forensic Engineer
- Soil Engineer
- Environmental Engineer
- Transportation Engineer
- Aeronautical Engineer
- Interior Designer
- HVAC Engineer
- Software Engineer
Coverages Included in Engineer Insurance
Engineer insurance offers the following coverages for engineers:
General Liability Insurance
General liability insurance covers medical costs or attorney fees that arise from third-party bodily injury or property damage. For example, suppose you order something online and the delivery personnel comes to your place of business and trips and injures themself on the wiring. In these types of scenarios, your general liability coverage will reimburse them for their medical bills.
Commercial Property Insurance
Commercial property insurance covers losses due to hazards such as fire, theft, or natural disaster. For example, if your business property is damaged due to a fire, this policy will help cover the cost of repairing the property. Therefore, businesses such as retailers, manufacturers, and service providers often purchase commercial property insurance.
Business Owners Policy (BOP)
A business owners policy is a combination of general liability insurance, commercial property insurance, and business interruption insurance. A BOP covers the following claims:
- Bodily injury
- Property damage
- Claims arising from natural disasters
- Claims arising from a temporary business shutdown
Workers Compensation Insurance
Workers compensation insurance covers the salaries and medical bills of employees who are injured while on the job. Imagine a construction worker puts in some extra hours to meet a deadline, but they end up breaking their arm. In this situation, your workers compensation insurance will pay for their medical bills and cover their lost salary while recovering.
This coverage is useful to include with your engineer insurance if you run an engineering firm.
Professional Liability Insurance
Professional liability insurance compensates for losses that arise due to professional mistakes. This policy is also known as errors and omissions insurance. Engineers are vulnerable to professional liability claims since they have to provide services according to their client’s requests. Therefore, if the clients feel that the service provided doesn’t meet the terms of the contract, they can file a claim.
Business Interruption Insurance
Unforeseen circumstances such as a storm or accident can cause physical damage to your place of business, thus leading to a temporary shutdown. If your business shuts down temporarily, business interruption insurance will cover the lost revenue and employee wages during the duration of the shutdown.
Pollution liability insurance protects you against claims arising from pollution caused by your business. In an article by AP News, US Steel paid $8.5 million in a settlement for negligently allowing air pollution emissions to be released near Pittsburgh, PA. Therefore, it is better to protect yourself by including this coverage in your engineer insurance.
Commercial umbrella insurance covers in situations where claims exceed your general liability insurance and workers compensation policy limits. Let’s say your engineering firm is accidentally set on fire. The fire damages the neighboring businesses as well. In this case, your general liability policy only covers half the damages. As a result, the remaining will come out of your personal funds. However, if you have umbrella insurance, your personal funds are never used and your umbrella policy insurer pays out.
Commercial Cyber Liability Insurance
A commercial cyber liability insurance policy helps you in case of a data breach or cyberattacks. Engineering firms often have client information stored on their computers. Such information is confidential and can be a magnet for claims if left unprotected.
Marriott lost $72 million after losing the private data of 383 million guests in a data breach as per a news report by CNN. However, they were able to collect $71 million from their insurance. Given these points, having a cyber liability coverage with your engineer insurance is viable.
Commercial Auto Insurance
Commercial auto insurance protects vehicles used for business purposes. The policy covers the costs of vehicle repair or replacement in cases of accident or theft.
Additional Policies to Purchase With Engineer Insurance
Computers and media coverage: Computer and media policy covers lost income due to computer systems being affected by viruses. It also provides coverage for the cost of repairs and replacement.
Accounts receivable coverage: Accounts receivable coverage coverage protects businesses in the event an insured peril destroys their accounts receivable records. Engineers work on a single project for months and if they lose their accounts receivable records it can make it very hard for them to get paid. The policy will also cover legal charges in case the client data is breached or stolen.
Equipment breakdown coverage: Equipment breakdown coverage safeguards the equipment required for daily business operations. It covers the lost income, the necessary costs for restoration, damaged inventory, as well as repair costs.
Design-build: This policy pays for the personal injury or property damage caused due to a defective design.
Design professional liability: Design professional liability coverage shields you from claims alleging you of defective design.
How Much Does Engineer Insurance Cost?
Engineering is a vast field, and the cost of insurance depends on various factors. Since different areas have unique risks, their insurance requirements change accordingly. The following factors determine the cost of engineer insurance:
- Type of polices selected
- Policy limits
- Risks of your business niche
- Business revenue
- Property value
Need this type of insurance for yourself? Find a local insurance agent right now!
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January 30th, 2023 · 4 mins read
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