Professional Indemnity Insurance for Engineers
How can liability arise?
The sources of risk can include, but are not limited to:
- Errors & Omissions
- Negligent advice on design, material sourcing or specification requirements
- Incorrect certifications
- Planning and execution discrepancies
- Breach of Professional Duty
- Failure to live up to contractual obligations
- Sub-standard quality of final output
- Poor work documentation
- Insufficient supervision
- Breach of IP and copyright laws
- Failure to act in accordance with client instructions
- Insufficient communication with clients
- Acting outside the Professional's roles and responsibilities.
- Unethical behaviour
What Are The Common Pitfalls?
- Allegations of a breach of professional duty can be made not just against you or your immediate employees but also against your Contractors
- Make sure your Professional Indemnity Insurance policy includes a comprehensive coverage of civil and legal liabilities arising from Vicarious Liability
- After you cease business or retire from your practice, you may still be held liable for claims raised against you
- You could look into a Run-off cover that will protect you even after your retirement
Also Read: 5 Facts About Professional Indemnity Cover
What Are Some Examples of Typical Claims?
Scenario 1:
You have been newly contracted for a client’ home renovation project. You needed to determine if the walls were load-bearing or not in order to be able to safely remove a wall and create an open-plan space like your client asked for.
However, the client claimed that due to following through with your subpar recommendations, several structural damages were detected and additional costs needed to be borne by the client for the ensuing repair works.
Even though it is likely that there were hidden internal structural damage prior to your consultation, the client may have a cause of action for your alleged error – this loss should be covered by your policy.
Scenario 2:
You are a self-employed civil engineer who was brought on board to conduct a topographical survey to upgrade a private road for your client.
There were discrepancies encountered on site between your survey model and an external surveyor’s plans which is expected to cause significant delays to the project timeline and increase costs as a result. Your client wants you to cover the discrepancies – this loss scenario should be covered by your policy.
Scenario 3:
You find out that your client has filed a lawsuit against you, alleging that one of your subcontractors has provided a substandard quality of service and has thereby breached contractual obligations.
You incur significant costs in defending this action – this loss scenario should be covered by your policy.