With British Petroleum facing a staggering three dozen lawsuits ranging from wrongful death to environmental damage, it seems like a good time to ask yourself if your engineering firm has adequate professional liability insurance coverage.
While it’s probably safe to say that your company will never be subject to anything approaching the magnitude of the Gulf Oil Spill, in today’s litigious society, it’s equally safe to say you are a target. And if yours is a small company, it only takes one individual or class action suit to put you out of business, whether or not you’re at fault. Here’s what you need to know when looking for professional liability insurance quotes for engineers to lessen your risk exposure.
Professional liability insurance was created to protect professional service firms from liability caused by acts of negligence and errors or omission that occur in the course of performing your professional services. It’s similar to the malpractice insurance doctors, dentists and lawyers must carry.
Professional liability risks are not included in your general business liability policy. General business liability insurance protects you from claims that occur but are not directly related to the performance of your professional service. For example, if a vendor or delivery person is injured in your office.
Your bare minimum coverage should also include Engineering Professional Liability Insurance and Engineering General Liability Insurance. The first will protect you from lawsuits arising from alleged errors or omissions in your work -- for instance, if a mistake in a design created by your firm results in damages. The second protects you from claims of property damage, bodily injury and loss of income such as might occur if a client, vendor or delivery person slips while visiting your office.
Some clients may require that you name them as an additional insured on your engineering general liability policy. This is frequently the case if you sign a contract or permit that ask that you specify a client as additional insured on your Engineering General Liability policy. Make certain that your policy automatically provides primary coverage for the additional insured so that you don’t need to ask for (and pay for) an extra endorsement.
In addition to the two professional liability insurance policies named above, you may also want to get quotes for umbrella coverage, which can provide up to $10 million in additional protection against general liabilities.