Engineering Insurance
Learn about engineering insurance coverage, companies, and cost.
Written by
Ann Herro has been writing about insurance and employee benefits for over 15 years. She has covered topics as easy as insuring a car, and as difficult as transparency in healthcare costs.
Reviewed by
Cara Carlone is a licensed P&C agent with 20 years of experience. She has her P&C license in RI and TX and holds CPCU, API, and AINS designations.
Mitigating the diverse range of risks that an engineer can face is difficult. And risk levels vary for engineers, depending on the type of engineering work that you do and the amount of responsibility you have for a project.
Whether you’re a mechanical, civil, electrical, or any other type of engineer, you need engineering insurance to help guard against your risks. Engineering insurance is a type of business insurance designed for the unique needs of engineers.
A local independent insurance agent can help you get the engineering insurance you need.
Best Engineering Insurance Companies
Many insurance companies offer business insurance, including engineering insurance, but not every insurance company operates in your state. Here are a few recommended business insurance companies that you may find in your area:
- Progressive: Progressive is based in Ohio but offers business insurance across all 50 states. You can look to Progressive for most of your business insurance needs.
- Travelers: Travelers offers highly rated personal and business insurance across the U.S.
- Foremost Insurance Company: Foremost was founded in 1952 and offers a wide range of coverage, including business insurance, in 50 states.
- Nationwide: Nationwide provides business insurance and other popular types of insurance coverage. The company is headquartered in Columbus, OH, and is represented by independent insurance agents in 50 states.
- Liberty Mutual: Liberty Mutual is headquartered in Boston, MA, and has been offering business insurance since 1912. Today the company offers a flexible, multi-line range of coverages designed to meet the needs of any business, regardless of size or industry.
A local independent insurance agent can help you find the right insurance company for your engineering insurance.
What are the Main Risks That Engineers Face?
While all businesses have their own share of risks, the world of engineering is a bit more complicated. Even within the profession, there are a number of different types of engineers who work to invent, design, build, and ensure the safety of just about everything we encounter.
Here are some of the main risks that engineers face:
- A client claiming work was completed unsatisfactorily
- An employee becoming injured or ill on the job
- Third-party injuries and property damages
- Your office catches fire, is burglarized, or is vandalized
- Vital equipment and computer breakdown due to a mechanical or electrical failure
It’s important to work with an independent insurance agent who can both help evaluate your risks and identify the types of coverage you need to protect what you do on all sorts of projects.
What Does Engineering Insurance Cover?
Engineering insurance is a package of business insurance policies tailored to the needs of engineers. The exact type of coverage you need will depend on the type of engineer that you are, the size of your business, and a variety of other factors.
Here are the types of insurance coverage that most engineers need:
- Commercial general liability (CGL) insurance: If your client, an employee, or a contractor claims you or your employees caused bodily injury or property damage, this policy compensates the injured party and pays for your legal defense if you’re sued.
- Commercial property insurance: If your office catches fire or is burglarized, this policy pays for repairing and replacing damaged property, including office furniture, computers, and so on.
- Business interruption insurance: This provides coverage for lost income and ongoing expenses like employee wages and rent if you must temporarily cease operations after a catastrophic event.
- Professional liability insurance: Also called errors and omissions insurance, this policy covers actual and alleged errors in the professional services you provide. It reimburses the injured party for financial damages and covers your legal fees when you’re sued for professional negligence.
- Workers' compensation insurance: Although engineering offices may not be at high risk for on-site injuries, you still need workers’ compensation insurance to cover costs for any employee who is injured or becomes ill as a result of their work.
- Equipment breakdown insurance: If you have equipment and computers that are vital to your operation, you can insure that property against breakdowns and malfunctions, whether due to mechanical or electrical failure.
- Commercial umbrella insurance: This is extra liability insurance that provides additional coverage above and beyond your general liability insurance policy.
- Commercial auto insurance: This is auto insurance for your business-owned vehicles. It covers injuries and property damage caused by anyone driving your company vehicles and covers damage to those vehicles if they’re damaged, regardless of fault.
An independent insurance agent can recommend these and other engineering insurance policies that are vital to protecting your interests.
How important is professional liability insurance for engineers?
As an engineer, your professional liability risks are significant. It only takes a small mistake or error in judgment to endanger a project’s success and cost a client both time and money. Professional liability insurance for engineers protects you when you make an error in the professional services you provide.
Here are some examples of when it would apply:
- You neglect to warn clients of potential problems with a project.
- The services you provide inadvertently cause a business owner to make decisions that result in a loss.
- You cut corners to meet a deadline, which results in the need for costly repairs down the road.
- You make a mistake in your calculations that results in some type of catastrophic failure.
A lawsuit for professional negligence will be very expensive, and even if the claims are unfounded, you will still incur legal fees to mount a defense. Engineer professional liability insurance covers your legal defense fees, and if the court rules in the client’s favor, your insurance can also help to pay a settlement or judgment.
Be sure to work with an experienced independent insurance agent, who will ask you the right questions and match you with the appropriate professional liability policy.
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How Much Does Engineering Insurance Cost?
It’s hard to predict exactly how much your engineering insurance will cost. Much depends on the unique characteristics of your business, such as the location, the number of employees, the value of any commercial property you own, and many more variables.
If, for example, you’re a sole proprietor with no employees and you work from a home office, you’ll pay far less for engineering insurance than a large firm with staff, office space, and physical assets.
How Can an Independent Insurance Agent Help You Find Engineering Insurance?
Independent insurance agents have experience in dealing with all kinds of businesses and insurance policies. They excel at matching the most appropriate policy to the business in need.
A local agent will review your needs and help you evaluate which engineering insurance policies make the most sense. They'll also compare quotes from multiple insurance companies to make sure you have the best coverage for your needs and budget.