Becoming a licensed engineer is one of the most secure and fulfilling career paths around the world. Currently, there are over 300,000 members in Engineers Canada, the national organization comprised of the 12 engineering regulators in the country. As the number of licensed engineers grows, the landscape becomes more competitive for independent professionals and engineering companies/firms alike. This makes sufficient risk management more important than ever before. Insurance can cover engineering companies from various risks, thereby avoiding or minimizing possible setbacks and ensuring that the business survives and continues being profitable.
In this article, we will cover the main types of insurance policies that an engineering company or firm needs. Let’s get started!
Why is Engineering Insurance Necessary?
An Inherently Risky Work Environment
There are various kinds of engineers, such as civil, electrical, and mechanical engineers - just to name a few. What’s common among these different kinds of engineers is that they often work with heavy materials and powerful equipment. This means that most engineering workplaces are fraught with its unique set of risks that are found nowhere else. If you are the owner of an engineering company, accidents can happen to any of your employees, leading to costly liabilities.
Dealing with High-Stakes Projects
In the engineering profession, it is vital to win and maintain trust. This is because engineers usually deal with high-stakes projects and the budget to match. Mistakes (or perceived mistakes) can lead to lawsuits from the clients and/or result in a negative image for the company which can take a great deal of time (and money) to recover from.
Proximity to Third-Party Individuals or Property
For certain engineering professions, projects can be at a close proximity from third-party individuals such as clients, the general public, and suppliers. Sometimes, projects can be near to third-party properties as well. As such, engineering companies are obligated to ensure the safety of these individuals and of any nearby third-party property.
So considering all these factors, here are the types of insurance that engineering companies need to make sure that they are fully protected.
What Types of Insurance Do Engineering Firms and Companies Need?
Professional Liability Insurance
Professional liability insurance is needed by both independent engineers as well as engineers who work for a company or firm. This type of insurance is also known as the Errors and Omissions (E&O) insurance.
Given that engineering companies often work with high-stakes projects and that the landscape is highly litigious, errors, perceived errors, unexpected costs, and delays can lead to lawsuits from the client. Therefore, professional liability insurance is meant to provide needed coverage in such cases. This type of insurance will also cover any eventual damages or injuries caused by faulty design.
General Liability Insurance
Earlier, we discussed that some engineering professions have workplaces (or sites) that are near to the general public. This is particularly true for civil engineers working on construction projects in a commercial area, however, even for other kinds of engineering work, clients may regularly visit the site of the project to check in. Additionally, suppliers and other partners may also visit the site from time to time.
General liability insurance will protect your business in the event that third-party individuals sustain an injury and your company is held legally and financially responsible. This type of insurance will also cover you in the event that your employees accidentally inflict damage to property owned by a third-party.
Worker’s Compensation Insurance
Most engineering professions involve work in hazardous environments including the operation and usage of heavy materials, and powerful equipment; because of this, it’s important to have coverage for your employees in the event that they sustain an injury, become ill, get disabled, or even die while on the job. Worker’s compensation insurance will cover ongoing medical costs, disability benefits, lost wages during recovery, funeral expenses, and even death benefits.
Most engineering companies have a physical office. This space is where you keep valuable tools, equipment, documents, and various other possessions. If this workspace or its contents sustain damages due to natural disasters or vandalism, or if someone steals any of the contents of the workspace, it can lead to costly repairs, replacements, and business interruption.
The right property insurance will cover you for such costs and replace any lost income your business sustained during downtime, thereby helping your company get up and running again smoothly.
Commercial Vehicle Insurance
Engineers tend to travel to project sites quite often. If your company provides a fleet of vehicles for this purpose, then you need commercial vehicle insurance to cover you in the event that your vehicles get into an accident and cause injuries or damages. Additionally, the vehicle itself will likely also sustain damages.
Commercial vehicle insurance will help cover medical, repair, and replacement costs. This kind of insurance will also cover you in the event that your commercial vehicle is maliciously vandalized or damaged.
Cyber Liability Insurance
Most businesses these days rely heavily on technology to perform with utmost efficiency. The downside to this, however, is that cyber criminals are always finding ways to cash in. In the event that your technological devices are hacked or subjected to various kinds of malware, cyber liability insurance has you covered.
This kind of insurance will cover the costs for lawsuits against you regarding lost data, lost income during the downtime, and the cost of restoring your reputation.
Get Engineering Insurance from Toronto’s Award-Winning Insurance Broker
KASE Insurance is one of the top insurance brokers in Toronto and across Canada. We have many years of experience serving businesses of all shapes and sizes; and through the years, we’ve won awards and industry recognition for the top-notch service that we provide.
Our customer-centred approach enables us to put together engineering insurance policies that are tailor-fit for the needs of your business. If you would like to get business insurance for your engineering company, we’d be happy to help you get started. We can also help if you are seeking to review the current insurance that you have in place.