Professional indemnity insurance covers engineers for advice they give, whist a public liability insurance policy covers engineers should they be held liable for any third party injury or property damage while they are on site.
However, with such a diverse profession (including industries such as Chemical, Mining, Forensic, Landscaping and Communication), it’s important to get a crystal clear understanding of the specific type of engineering services and activities that need to be insured in order to find the most appropriate insurance policy.
Why do engineers need a comprehensive insurance policy?
There are a wide range of situations when engineers will require the security of an insurance policy.
Common examples of risks that engineers can face on a daily basis include:
- Allegations of professional negligence
- Inadequate design or specification
- Poor project management
- Incorrect certification
All engineers will know the importance of having the best level of cover possible in place. However much you try, very little goes 100% to plan on the types of jobs and projects that engineers generally work on.
Sometimes you may be let down by a sub contractor, or there may be issues out of your control such as bad weather or unexpected delays.
Ultimately, you need to ensure that you are fully covered for all of these scenarios – and the delays they’ll cause to you and your client.
The insurance requirements for engineers can be confusing however it’s essential that you don’t neglect your engineer’s insurance. By not being appropriately covered, you may end up being personally liable for costs such as legal fees or substantial claims – all of which can have a crippling effect on your business.
Engineering Insurance Essentials
Due to the nature of the projects and work that engineers carry out, they have a crucial duty of care to a wide network of people – from their clients and the contractors, to additional consultants and members of the public.
As well as covering the physical risks associated with projects involving construction or architectural work, full insurance coverage will protect engineers who are constantly required to offer advice and direction.
All engineers in Australia must hold both Professional Indemnity and Public Liability insurance policies. In addition, both of these must conform to the standards that the National Council of Engineers Australia set out.
Professional Indemnity Insurance for Engineers (often known as PI Insurance)
A requirement for all engineers, this is essential to protect against claims alleging a breach of professional duty including both damages payable and legal costs that are inferred in defending the claim.
Engineers are considered in these cases to be “experts” with a “Duty of Care” therefore if this duty is claimed to be breached, the people affected may be able to claim damages against you.
By having professional indemnity insurance, you will not only be complying with government regulations but also ensuring that your assets are protected in the case of a costly claim.
Public Liability Insurance
Engineers are generally working in spaces with the general public, contractors, other staff and clients. Public Liability Insurance is essential as it protects you against any liability, which arises from injury or damage occurring on or around the premises or in connection with your business.
The most common instances where Public Liability Insurance proves itself invaluable are when there is personal injury to a third party or damage to a property.
Claims can be made for anything from a slip or fall in the workplace, to a death or serious damage to property.
Accidents inevitably happen and it’s often the smallest of errors that can lead to big public liability claims therefore it’s always best to be fully covered.
How much professional indemnity and public liability cover do engineers need?
The amount of insurance cover that you need will depend on a variety of factors. It’s always best to seek out expert advice to ensure that you are fully covered in every way possible, however the information that you should base your decision on will include:
- The specific nature of your engineering work and the corresponding risks
- Regulations in your geographical location or specific industry
- Overall value of project or asset
- The size of your business and what you can afford
Better safe than sorry
Although it can seem like a large initial cost, protecting your business is truly priceless.
Unfortunately, things don’t always go to plan and it’s hugely important that you are fully covered with both Professional Indemnity and Public Liability Insurance.
If and when things do go wrong, you’ll have the peace of mind that you won’t be liable for costly legal claims and that you can continue to work as normally as possible.