As an engineer, you face a particular set of risks. Therefore, you need a comprehensive policy package that ensures your business is protected from all eventualities. Luckily, our team at LiabilityCover can help you get the best deal!
In the following sections, you’ll discover the ins and outs of engineering liability insurance to keep your business thriving through tough times.
Insurance Policies for Engineers
Engineers are the brains behind today’s world. Whether it’s a bridge connecting two parts of the land or the toaster you use for breakfast, engineers are truly the backbone of the modern environment.
As a professional in the engineering industry, you are a key part of both the design and implementation phases. Your clients rely on your knowledge and experience to work safely and meet all the project’s requirements.
But unfortunately, life doesn’t always run so smoothly. Unforeseen accidents can occur even during the most meticulously thought out plan, hence why it’s so important to protect your business with insurance policies.
At LiabilityCover, we assess your unique risks and connect you with an insurer well-versed in comprehensively covering engineers.
What Is Engineers Insurance Coverage?
Engineers insurance is a comprehensive policy package designed to protect professionals providing engineering services. It protects against errors, omissions, third-party accidents, negligence, and third-party property damage.
Common Engineers Insurance Coverage Claims Scenarios
Here are a few scenarios where engineers insurance can save your business from permanently closing its doors:
Example One: Design Error Claim
You were held liable for design errors in the air-handling unit installed in a new municipal library.
The municipality sued you for the costs associated with repairing the system. Your comprehensive insurance covered all the expenses related to the case.
Example Two: Property Water Damage Claim
You are a mechanical engineer. Your field review techniques were critiqued when insufficient piping was used in a new residential dwelling. The error caused extensive water damage to the property.
The client sued you for negligence. But, your professional liability insurance paid the otherwise insurmountable fees and settlements.
Example Three: Negligence Claim
You approve a design to make cosmetic changes to a little bridge in your neighbourhood. The plan involves adding new material to the railings.
During a windstorm, a few new railings detach from the deck, making the bridge unsafe for pedestrians and vehicles.
The municipality successfully sued for the damaged bridge and professional negligence. Thankfully, your professional liability insurance policy covered the legal fees and the cost of repairing the bridge, equalling $200,000.
Example Four: Inadequate Field Review Claim
You are a civil engineer hired to excavate a municipal drain. You do so using the recommended excavation method. Sadly, the drain collapses when you begin backfilling since you failed to use the correct process.
The municipality sues you for insufficient field review, claiming you could have corrected the backfill procedure to avoid the damage. Their lawsuit is successful, but your insurance coverage pays all the associated fees.
Example Five: Skin Reaction Claim
You are a chemical engineer. A local beauty store hires you to create a highly effective, fast-acting anti-aging moisturizer for sensitive skin.
The project goes smoothly, and as soon as it hits the shelves, people are flocking to purchase it. But unfortunately, multiple people had severe reactions to the moisturizer, and the beauty store had to recall the product.
Inevitably, the store’s owner sues you for failure to create an effective and safe moisturizer. Thankfully, your professional liability policy covered the product expenses, medical fees, and legal, equalling $50,000.
Example Six: Revenue Loss Claim
You are a computer engineer. A food delivery business has hired you to create a new app for them.
A few weeks from the project’s completion, you notice an error in the app. The issue took several weeks to fix, delaying the app’s publishing date.
Your client claims your inability to complete the project by the deadline resulted in them losing business revenue and a new contract from a huge restaurant.
Luckily, your errors and omissions insurance paid the legal and compensatory fees, totalling $150,000. Without the policy, your business would need to pay the costs out of pocket, which would be enough to make many small companies fold.
What Does Engineers Insurance Cover?
Engineers insurance refers to a myriad of insurance policies combined into one comprehensive package for the profession.
Generally speaking, you will find the following coverages in a professional engineer’s insurance bundle:
Commercial General Liability Insurance (CGL) Coverage
Commercial general liability insurance (CGL) is a fundamental policy that protects against daily operational risks, such as third-party property damage or bodily injury. All businesses in Canada should take out this kind of insurance to ensure they can survive allegations and lawsuits.
The policy covers the following specific areas:
- Tenant’s legal liability — It ensures the costs involved with replacing or repairing a property you occupy are covered. You still might need a commercial property insurance policy as well.
- Bodily injury liability — This includes damage to third-party people and properties caused by your business operations, including slips and falls.
- Product liability — It covers property damage or bodily injury caused by your product.
- Personal and advertising injury liability — This part of the policy covers allegations of false advertising, slander, libel, and defamation.
We strongly suggest commercial general liability insurance if one or more of the following applies:
- Your clients visit your office space or home.
- Your staff operate business off-site.
- You visit your client’s office or home.
Commercial Auto Insurance Coverage
As an engineer, you often drive from job to job. So, you must acquire a commercial auto insurance policy as any personal auto coverage won’t provide protection for work-related driving accidents.
Any vehicle used to transport materials, packaged goods, people, tools, and equipment should have sufficient coverage. Like personal auto insurance, there are plenty of customization options, including:
- Collision coverage — It covers the costs of repairing or replacing your vehicle if it’s damaged or written off during an accident caused by you.
- Comprehensive coverage — This optional coverage protects your vehicle from damages caused by natural disasters (i.e., severe weather), vandalism, and theft.
- All-perils coverage — This is a mixture of collision and comprehensive endorsements. It also protects you from vehicle damage if your employee steals the car.
- Specified perils coverage — It covers the perils specified in your policy.
Professional Liability Insurance Coverage
Professional liability, otherwise referred to as errors and omissions insurance provides coverage for failure to deliver a service as promised, negligence, and misconduct. If your customer isn’t satisfied with your advice or service, they can take legal action against you.
In the engineering field, there are countless situations where you will need a foolproof professional liability policy to cover legal fees, damages, and monetary judgments.
Cyber Liability Insurance Coverage
No matter what kind of engineer you are, you’ll conduct some elements of your business digitally. In which case, cyber liability insurance can prevent costly containment and restoration fees following a cyberattack.
As a general rule, you should purchase a cyber liability insurance policy if at least one of the below applies:
- You use a point-of-sale system.
- You store your customer’s information, including financial data (i.e., credit card details)
- You use the cloud or other computer systems to store business-related information.
- You offer hardware or software services to your clients.
It’s a common misconception that hackers don’t target small businesses. In reality, they often prefer infiltrating smaller operations as they believe (and typically rightly so) there won’t be many security measures in place.
Equipment and Tools Insurance Coverage
Whether you own or lease your equipment and tools, an equipment and tools insurance policy might be a smart move. It covers damage or loss to any equipment used to finish a job.
The most common covered event is theft. Wherever you store your tools, you risk somebody breaking in to steal them. If the robbery is successful, the loss of these items will impact your ability to finish projects. With the right coverage, your insurer funds the replacement of all stolen pieces, allowing you to get back to work quickly.
Workers Compensation Coverage
If you employ people, you need workers’ compensation insurance. No matter your work environment, your employees can have accidents and sue you for damages.
The requirement for workers’ compensation insurance is stipulated in the Workers’ Compensation Act enacted by the former Chief Justice of Ontario, Sir William Meredith. The four key parts of the Act are as follows:
- Employers will bear the cost of compensation
- Injury fault and negligence aren’t considered
- Workers give up their right to sue employers and receive compensation instead for work-related injuries
- The WCB (Workers’ Compensation Board) has jurisdiction over all matters related to the legislation
Generally speaking, you must register for workers’ compensation if your business is incorporated or you have employees. The program is administered provincially.
Pollution Liability Insurance Coverage
Certain types of engineers (chemical and industrial) require pollution liability insurance. It offers coverage for third-party bodily injury, property damage, and environmental problems occurring from pollution events on the job.
The coverage is available in two forms:
- Claims-made — This type covers pollution liability claims made within your present coverage level.
- Occurrence basis — This type covers pollution liability claims at the coverage amount you had for the year.
Most pollution liability policies list standard pollution events. However, some insurers provide endorsements to expand the definition of pollution conditions to include:
- Microbial matter
Who Requires Engineers Insurance Coverage?
Any business or individual offering an engineering service should ensure they’re protected against common liability risks with a comprehensive insurance package.
We’re proud to have found coverages for all kinds of engineers, including:
- Geotechnical engineers
- Mechanical engineers
- Civil engineers
- Electrical engineers
- Management engineers
- Chemical engineers
- Marine engineers
- Software engineers
- Environmental engineers
How Much Does Engineers Insurance Coverage Cost?
Typically, you can expect to spend around $500 per year for a professional liability insurance policy with a coverage limit of $250,000.
However, many factors are considered when insurers calculate your particular premium price, including:
- The type of engineering — As you know, there are many types of engineering. Depending on which category you fall into, your premiums may increase or decrease based on your unique occupational risks.
- Your years of experience — With experience comes a lower likelihood of making mistakes. So, engineers insurance premiums often reduce as you gain more industry experience.
- The number of employees — The more people in your team, the higher the chance of a lawsuit. Insurers may also consider the experience and credentials of all staff to estimate your risk level more accurately.
- The tools and equipment you own — The worth of your tools can impact the insurance price. Plus, some pieces of equipment are more dangerous than others, increasing the cost.
- Your operating locations — Some areas of the country are prone to adverse weather or crimes like theft and vandalism. Running an engineering business in these places can spectacularly increase your insurance premiums.
- Your annual and projected revenue — Of course, making a lot of money is terrific. After all, it’s a quantitative indicator of success. However, the more money you make, the more at stake during a lawsuit. Generally speaking, lawyers encourage their clients to request higher compensation amounts when they know the company’s revenue can withstand the withdrawal.
Why Choose LiabilityCover for Your Engineers Insurance Needs?
- Ease — You kickstart the process by completing our short inquiry form, and then we do all the hard work!
- Trusted — We’re trusted by the leading insurers in the country. We guarantee a good deal from high-quality companies.
- Experienced — We’ve got years of experience connecting engineers with the best-rated insurers under our belts.
Frequently Asked Questions
Is Engineers Liability Insurance a Legal Requirement in Canada?
No, it isn’t a legal requirement. However, it’s imperative to obtain coverage to protect yourself and your business during lawsuits alleging property damage, bodily injury, and more.
If you’re a member of the Ontario Society of Professional Engineers or a similar provincial entity, you might receive complimentary secondary professional liability insurance. The limit for OSPE members is $125,000 and a half-hour legal consultation over the phone.
Will Engineers Insurance Cover You While You’re Training?
Your policy will cover engineers-in-training. All your employees are held under one policy, meaning the coverage limit applies to everybody. In some cases, you might want to think about increasing your limit or request your employees hold their own policy.
How Long Are Engineers Liable For Their Work In Canada?
The Limitations Act, 2004 details the limitation and suing periods for engineers. When enacted, it consolidated the plethora of rules found in numerous statutes in the country.
According to the Act, the standard limitation period is two years. Thus, legal action must commence within two years of the omission or act that caused loss, damage, or injury. In other words, engineers are held liable for their work for 24 months.
It’s worth noting that the time you complete the work isn’t included in the limitation period. Instead, the Act stipulates the two-year period begins when your client discovers the damage. Compared to the previous regulations, it drastically increased engineers’ liability period.
With that said, the legislation also included an “ultimate limitation period.” The clause states you can’t be held liable for work you performed over 15 years ago unless you’ve knowingly concealed the error or omission.
Does Engineers Insurance Cover All Kinds of Engineers?
Yes, engineering insurance bundles multiple policies to ensure complete protection for your specific engineering business.
Once we assign a broker to you, they work alongside you to assess your unique risks. That way, you’re sufficiently covered from all scenarios. Plus, it ensures you never pay for policies that don’t apply to your business type.
How Do You Get Engineers Insurance Coverage?
Here at LiabilityCover, obtaining engineering liability insurance is straightforward. Take a look at our process below:
- Complete our short request form.
- One of our team members will review your insurance needs.
- We’ll assign you a leading broker with extensive experience providing insurance to engineers.
- The designated broker or agent contacts you to help obtain the necessary protection.
How Can You Reduce Your Professional Liability Insurance Premiums?
There are plenty of ways to reduce your insurance premiums. Find our top ten tips and tricks below:
- Pay premiums in installments — Insurance can cost a substantial chunk, depending on the specific policies present in your engineering bundle. So, it might be a good idea to pay your premiums monthly or quarterly rather than a year in advance. With that said, some insurers offer incentives (for example, discounts) if you’re willing to pay the whole premium upfront.
- Decide whether you’re paying for unnecessary coverage — Most commercial policies won’t duplicate other kinds of insurance. However, there might be some overlaps in certain policies. Examining your policies and eliminating any overlaps can save you a bunch of money. Plus, businesses change, so some policies may no longer be appropriate for you. Cancelling those plans frees up some extra cash too. When you use LiabilityCover, our brokers assess your engineering insurance needs to put together a plan free from overlaps, duplicates, and unnecessary coverage. So, you don’t need to worry about this tip with us.
- Be proactive about safety — Putting together a practical workplace safety plan can eliminate or at the very least reduce hazards that could cause accidents and lawsuits. Once created, send a copy to your insurer so they can see you’re taking meaningful steps to prevent claims. In addition, make sure you and your team members wear the appropriate safety gear (hi-vis, helmets, etc.).
- Properly classify your employees — When you buy workers’ compensation coverage, you’re assigned at least one classification that reflects the scope of your company’s operations. Each classification comes with its own rate that reflects its riskiness, and therefore, the premium price. Make sure your business receives the best classification to avoid overpaying and chat to your broker if you believe you’ve been wrongly classified. You might be surprised by how much money you can save.
- Provide adequate training to your workers — Well-trained employees are less likely to injure someone else or themselves while on the job. Plus, they won’t make as many mistakes and cause numerous negligence or errors and omissions lawsuits. Ensuring adequate training lowers the risk insurers take on when covering your business.
- Take note of trade organizations — Some trade organizations provide complimentary insurance coverages. Normally, the policy limits aren’t as high as you need, but it certainly helps save a bit of cash.
- Make a good impression — Depending on the insurer, you might need to supply a proposal form. The form will be considered by an experienced underwriter. Make sure you represent your business well, as it might be the first and only time you get to make an impression.
- Plan renewals early — Once you receive a policy from one of our leading brokers or agents, ask them about their renewal plans. We recommend discussing renewals at least two months before your policy’s end date to avoid any last-minute issues.
- Be clear about your timescale — Ask your broker to send you a renewal letter with the coming year’s quotation one month (preferably more) before your renewal date. Ideally, all parties should understand the timescale when you purchase the policy.
- Explain claims — If you’ve made any business insurance claims in the past, provide a detailed explanation and background information. That way, your insurer can make an informed quote calculation. To be in with the best chance of success here, offer assurance on the actions you’ve taken to avoid a similar claim.
Does Engineers Insurance Cover All Parts of an Engineering Project?
You need to check with your broker here. In general, most policies cover every phase of the project. But it’s always best to make sure as coverage terms differ from policy to policy.