Insurance for engineering firms is one of the most nuanced industry classes when it comes to insurance products.
While you do need standard professional industry lines of coverage, Business Owner’s Policy, Professional Liability, Worker’s Compensation, Cyber Liability, etc, matching your specific line of engineering with the right carrier makes all the difference.
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Insurance for Engineers
When it comes to engineering firms, there is incredible nuance in the various activities that engineering firms engage in, the projects they take, the expertise that they have, etc.
That’s being said, first let’s run through the things that are fairly ubiquitous between different engineering firms, like a business owner’s policy.
The Business Owner’s Policy (or BOP) is going to include general liability, property, and a whole basket of coverages that you need to cover the general nature of your office and operations.
For the most part, the business owner’s policy is going to be relatively the same between carriers and types of engineering firms.
Other coverages that will be fairly standard between engineering firms will be cyber liability insurance, workers’ compensation, and commercial auto insurance.
As long as they know the type of engineering you do, you’ll either be accepted or not accepted to that carrier’s program. Once in, you’re fine.
Engineering Professional Liability Insurance
Where the nuance comes in for engineering firms is in the professional and errors and omissions coverage.
Engineering professional liability is incredibly important. This is where you should be spending the time with an insurance agency that is going to walk you through all the aspects of what you do and make sure that the errors and omissions policy that you purchase fits your class of business, your type of projects and expertise.
Because all professional liability insurance regardless of which carrier you choose are going to call their product, Engineering Professional and Errors and Omissions or Engineering E&O. This doesn’t mean all these policies are the same…
The general title for all these policies, this particular policy is going to be exactly the same, yet the actual language, the contract underneath that title can be incredibly different, profoundly different, game-changing for your business different.
I’ll give you a couple of quick examples. We work with an engineering firm that primarily sources its business from mining operations. So they’re helping mining operations better understand how to set up equipment, where to mine, what types of layering to do, how deep to go, how to avoid certain incidents or risks in their business, and how to set that operation up.
A standard engineering E&O policy is not going to cover the mining work.
We had to go out and find a company that is going to specifically address the needs and add back coverage where necessary to make sure that when you’re 300 feet deep in a mine talking about where the loaders can drive and park and the stability of mine walls, they had coverage.
On a standard Engineering E&O policy that going to be specifically excluded, but we found a company that would add it back in.
Thank about an engineering firm that works with waterways, or high-rise buildings or designs infrastructure. There is so much nuance and differentiation in specialty and all policies are not written equal.
This is where engineering firms need to spend some extra time with their insurance professional and make sure that that person understands what their risk is, that you’ve talked through the various expertise and that you’ve found a carrier and coverage that’s going to address if something happens.
You can make the tactical decision not to purchase insurance. I mean, you’re self-insuring at this point. It’s not that you’re just not going to be found liable if something happens, but you can self-insure.
We don’t advise self-insurance in any regard of this nature. But my point in saying this to you is you should make every decision with your eyes wide open seeing full transparency into what your policy has coverage for and what it does not, because you’re responsible either way.
Engineering insurance is very specific to your line of business.
If you need help, our team at Rogue Risk is here for you.
If this is the kind of relationship that you’d like with your agent or if your current insurance professional has never addressed these issues with you before, then I’d encourage you to reach out to us at Rogue Risk, today.
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I hope this article helped you better understand small business insurance.