Engineer Insurance

Engineers Professional Indemnity Insurance

The nature of engineering makes it a gratifying job for many. It requires creative design and an analytical mind to analyse complex problems, structures, systems and machines. It solves real-world problems while continuously putting safety and cost at the forefront.

An engineer is usually well versed in regulation for their specific field and would be aware of the potential pitfalls of the job. Considering the nature of engineering and the risks involved, taking out professional indemnity insurance (PII) for engineers is incredibly important for any engineer.

Most engineering governing bodies will likely require engineer insurance for their members because it not only provides a fallback for unforeseen professional liabilities but also communicates professionalism to clients. 

Is professional indemnity insurance a legal requirement for engineers? 

Although it is not legally required in the UK, engineer insurance is highly recommended by the Engineering Council, which is the authority that regulates the engineering industry in the UK. 

It is impossible to overestimate the advantages of professional indemnity insurance for engineers. Because engineering is a high-risk field and you’ll probably be working with certain budgets, one claim from an unhappy client could have a negative financial impact. 

Purchasing professional indemnity insurance offers protection from potentially financially disastrous liability claims. It will free you up to focus on the crucial work of engineering and problem-solving rather than worrying about unanticipated claims. 

Do I need professional indemnity insurance as a self-employed engineer?

Engineering insurance is an important type of policy for both self-employed engineers and those working for larger engineering businesses. An engineer working for a larger group may be covered by the insurance of the group, making the threat of financial ruin less likely. 

However, working as a self-employed engineer means you have to take care of your liabilities, which makes professional indemnity insurance for a self-employed engineer an absolute must.

If you are working as an engineer for a larger engineering business, make sure to find out whether or not you are covered by the business insurance as this may not necessarily be the case. 

What is the chance of an engineer facing a professional indemnity claim? 

Engineer indemnity insurance is highly recommended regardless of the risk levels you think you might face as an engineer. Even the most precise and accurate engineer could face unforeseen claims. 

Engineers are typically tasked with highly complex projects and things do not always run according to plan. Clients could make financial losses because of your advice or work done on a particular project, which could lead to a claim. 

One claim could cost a substantial amount in legal and compensation costs. Professional indemnity insurance for engineers gives you peace of mind regarding potential liabilities so that you can focus on the important job of creating solutions for your clients. 

What does professional indemnity insurance for an engineer protect against? 

Engineer professional indemnity insurance has real benefits for engineers. Some of the typical instances where cover is provided are as follows: 

• Claims that arise from negligence or breach of duty 
• Compensation costs to clients if a case is lost 
• Legal costs that quickly add up to defend a claim 
• Unintentional breach of confidentiality or privacy  
• Unintentional breach of intellectual property rights 

What are the typical policy exclusions under engineers’ insurance? 

Indemnity cover for engineers also has its exclusions. The following exclusions are similar to most other types of insurance coverage, but there may be exclusions specific to the type of engineering you do. Read your policy carefully to be sure of your inclusions and exclusions: 

• Intentional acts that lead to loss or damage.
• Criminal acts. 
• Situations or disputes that arose before the onset of the policy. 
• Liabilities that do not fall within the scope of professional liability insurance. 

You may need other types of insurance coverage when operating as an engineer. Some of these can include public liability, employers liability or cyber insurance. Some insurance companies may offer you a discount for bundling insurance policies. 

 How much does this type of engineering insurance cost, on average? 

Professional indemnity insurance for an engineer can vary from policy to policy, depending on the risk factors of your engineering business. For instance, the size of your engineering practice is a determining factor as well as the nature of the projects you typically undertake.

The higher the risk, the higher the premium will be. Your claims history also plays a role in the outcome of your premium, so try to maintain a clean record to enjoy lower insurance costs. 

How will my premium be calculated for engineer insurance? 

The premium for your professional indemnity insurance will be calculated using the following types of parameters: 

• The size of your engineering business 
• The types of projects you typically engage in 
• Your qualifications as an engineer and your years of experience 
• Your claims history year upon year 
• Your risk management practices as an engineer 

 Will my location affect the cost of my engineers’ insurance? 

Your location can affect the cost of your professional indemnity cover as an engineer. The reason is that different areas have different risk statistics. Urban areas are often considered high-risk areas, so the premiums for covering an engineer working in an urban city are typically higher. 

If you work in a small village or rural area you may pay less. However, other factors also influence the cost of your insurance which may increase the price even if you operate in a low-risk area. 

Will my business insurance claims history affect the cost of engineers’ PII? 

Your business insurance claims history can affect the cost of your policy as previous claims may indicate a higher risk of future claims to an insurance provider. If you want to keep your insurance costs to a minimum, try to maintain good risk management practices and apply safety protocols at all times while you’re conducting your work. By doing this you can potentially continue enjoying the benefits of professional indemnity insurance at a lower premium. 

Does my age affect the cost of PII for engineers? 

Your age can affect the cost of your professional indemnity insurance, but age is only relevant because it can highlight your experience as an engineer. Qualifications, ongoing training and years of experience count in your favour when looking for professional indemnity insurance quotes as you’ll be perceived as a lower-risk candidate by insurance providers. Essentially, you build your reputation over the years. 

Will my annual turnover affect the cost of engineers’ insurance? 

Yes, your annual turnover can affect the cost of your professional liability insurance. A higher yearly turnover could be due to larger-scale projects which inevitably means the potential risks are also higher. Insurers will assess the size and scale of your projects to determine an appropriate premium for the level of risk you carry as an engineer. It might help to compare various quotes from different insurance providers to find the insurance company with the best offer for you. 

How can I reduce the cost of my engineer indemnity insurance? 

There are a few ways that you could reduce the cost of your engineer indemnity insurance: 

1. Firstly, maintain a clean claims history. The less you claim the lower your premiums are likely to be. 

2. Secondly, prove your ongoing professional development by doing courses and staying on top of the latest risk management techniques and safety protocols.

3. Thirdly, keep implementing rigorous risk management protocols in your work. This could save you unnecessary claims. 
4. Lastly, before signing the first insurance offer that comes your way, compare as many quotes as possible to find the most affordable option for your circumstances. A comparison site like Quotezone.co.uk can make this task quick and easy.