NY Engineers Professional Liability insurance is a business insurance coverage that protects individuals or firms against claims relating to professional services rendered in course of performing engineering. The event causing the claim must started as an error, omission or negligent act by your business work or products.
Analysis of Engineers Professional Liability Insurance Coverage
Engineers Professional Liability insurance is a non-standard insurance coverage. This means that every insurance carrier which provides engineers professional liability insurance with have their own unique set of coverage conditions, limitations and underwriting guidelines.
Insurance coverage for engineers responds to third party claims against your business or a specific employees work while in the course of your business. Potential professional liability insurance claims include allegations of wrongful, professional actions.
As mentioned above engineers professional liability insurance is non-standard so it’s important that you review the declarations page of your insurance policy with an independent insurance agent to ensure that the services your business provides are covered under your current policy.
In addition to legal liability insurance protection for damages due to professional errors, omissions or negligent acts, such policies typically contain the defense, settlement and supplementary payments provisions common to all liability policies. This is the Duty to Defend clause. But it’s important to make sure that defense costs fall outside the limit of liability.
Exclusions to the NY Engineers Professional Liability Insurance Policy
Different engineers professional liability insurance policies may contain significantly different wording. This is expected since there is no standard form (as mentioned above). Policy exclusions are a very important way to make comparisons between different policies and insurance carriers. Potential exclusions to address include:
- The infringement of a copyright, trade mark or patent
- Insolvency/bankruptcy
- Failure to require insurance or bonding from subcontractors
- Failing to complete drawings, specifications or schedules on time, or
- Failure to act upon shop drawings on time.
Its very important to note that coverage for contractual liability should be added to your business insurance program and/or engineers professional liability insurance policy separately.
Additional situations which could potentially trigger exclusions in professional liability coverage include:
- Professional services performed by or on behalf of a joint venture of which the insured is a member if formed after the policy period has began. The usual method of insuring joint ventures is by special endorsement for each separate joint venture project.
- Express warranties or guarantees; estimates of probable construction cost or cost estimates being exceeded
- Dishonest, fraudulent, criminal acts or omissions, or those of a knowingly wrongful nature committed intentionally by, or at the direction of, any insured; libel or slander.
It’s important to note that these are NOT all the possible exclusions on NY engineers professional liability insurance policy.
In-House Engineering Exposure
Not every insurance carrier that writes engineers professional liability is also going to write in-house engineers who provide engineering services as part of a larger business. This type of service is often associated with large general contracting firms who have an in-house engineer member of the team for their involvement in the design functions, either directly or indirectly.d
When purchasing professional liability for an in-house engineer it’s important to look for all the same conditions and exclusions as a stand-alone engineering firm.
Project Based Engineers Professional Liability Insurance
This coverage is designed to provide professional liability protection only for a specific project.
Since the larger and more serious claims generally occur during or just after construction, the policy is issued to cover claims made during the construction phase of the project, and within a one year period after the project is completed.
The Project policy is not intended to replace a firm’s professional liability coverage to protect the practice. However, the Project policy is important in that it identifies professional liability costs for the project itself. Premium for the practice policy will reflect a credit that considers the work covered by Project policies.
The Insurance Take-Away
NY engineers professional liability insurance is an absolute necessity for any firm in the engineering business or with internal operations that perform an engineering function. In most cases an engineering firm’s largest exposure to loss is the professional exposure not the more traditional general liability insurance exposures like slips and falls.
If you have questions about your current engineering professional liability policy or if you would like to receive a quote for engineering professional liability please call our professional lines insurance specialist, Ryan Murray at (518) 456-6688 or click here to begin the process by email.
Thank you
Ryan Hanley, CIC