Architect & Engineer Insurance for Businesses
Professional Liability Insurance for Architects & Engineers, which is also known as Architects & Engineer’s E&O Insurance, is a policy that protects an individual, or firm against lawsuits that can arise from negligence from their professional capacity. As a professional Architect or Engineer, you are regulated by the Provincial Regulatory body which requires a duty of care to be maintained.
Any failure to maintain the duty of care, can result in the architect, engineer or firm being deemed negligent which can lead to legal and regulatory action. Part of the duty of care requirements for many architectural and engineering firms is to carry professional liability insurance, making coverage a necessity to work and operate.
Professional Liability Insurance for Architects & Engineers Coverage
Professional Liability Insurance (E&O) – provides coverage in the event of your firm’s alleged cause of financial loss to your clients as a result of failure to meet contractual obligations or negligent errors or omissions while providing professional services including:
- Design errors
- Project delays due to your firm’s error or omission
- Professional negligence
- Professional malpractice
- Professional misrepresentation
Which types of architects and engineers require E&O insurance?
The types of architects and engineers that require E&O insurance for engineers are as follows:
- Electrical Engineering Firms
- Civil Engineering Firms
- Structural Engineering Firms
- Environmental Engineering Firms
- Architectural Engineering Firms
Typically, this is a requirement once a firm enters into a scope of work for any construction project. The amount of coverage needed will depend on the project’s unique exposures and contractual requirements.
In most cases, contracts will require policy limits of $1 million, $2 million, or $5 million per claim. Given these ongoing contract requirements it is important to partner with a recognized engineering insurance provider who can navigate the insurance market and products effectively.
Can coverage be obtained for specific projects?
Yes. A Project Specific Professional Liability policy provides coverage to the entire project beginning at the design phase to 24 months past the completion date. This unique coverage will act much the same as policies described above but coverage is only applied to a specific project. This type of policy is usually obtained for complex projects where the value is $10 million or more.Get a Quote
How much does E&O Insurance for architects and engineers’ cost?
Insurance premiums for architectural and engineering firms can start as low as $2,000 per year and can scale up according to the firm’s details based on the following:
- Type of architecture or engineering services offered
- Annual gross fees billed
- Percentage of work contracted to sub-consultants
- Insurance claims history
- Professional designations held by employees of the firm.
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Engineers and architects should purchase a Commercial General Liability Insurance (CGL) to complement the professional liability policy. The CGL covers the cost of property damage or bodily injury caused to your client or third parties on your premises.
Of the two core policies, typically more claims arise for E&O in the engineering and architecture industry.
To get started with obtaining Architect or Engineer Liability insurance, your FCA broker will require a thorough understanding of your firm’s operations, services and completion of relevant applications. From here your broker will work to provide competitive quotes from the market and help you develop a robust risk management process in the effort to avoid future claim activity.
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Laura does the work to get us the best prices with the best coverage. She also keeps us abreast of the new types of insurance that a business such as ours might need. Her yearly renewal visit is comprehensive to say the least, but when she leaves, we all understand the exact nature of each and every policy our business has.
FCA covers us for all our business requirements, from equipment to liability, property, builds and everything in-between. Errol Williams is so patient and helpful; I am always confident that we are getting the best possible coverage at a competitive rate. Always the best service!
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