A mechanical engineer, who is protected by engineering insurance, running a maintenance check

What Types of Insurance Do Engineering Companies Need?

kase
Jul 20 2020

With great responsibility comes numerous sources of potential liabilities. This is particularly true for engineers who are tasked to design and facilitate the building of safe structures, machines, and systems. 

For engineering companies, there are many other possible causes of financial loss. Incidents like theft, cybercriminal activity, commercial vehicle accidents, and commercial property damage are just a few examples. This is why a complete engineering insurance plan is a must-have for managing risks.  

Currently, there are over 300,000 members of Engineers Canada. As the number of licensed engineers grows, the landscape becomes more competitive for both independent professionals and engineering companies/firms. A good risk management strategy with the right engineering insurance plan is necessary for ensuring long-term success. 

In this article, we’ll cover the main types of insurance policies that an engineering company or firm needs. Let’s get started!

Civil engineers with engineering insurance, overseeing a construction project

1. Professional Liability Insurance

Professional liability insurance is needed by both independent engineers and engineers who work for a company or firm. This type of insurance is also known as Errors and Omissions (E&O) insurance

Given that engineering companies often work with high-stakes projects, the landscape is particularly litigious. Errors, perceived errors, unexpected costs, and delays can lead to lawsuits from the client. Therefore, professional liability insurance provides needed coverage in such cases. 

This type of engineering insurance will also cover faulty design that does not result in injury or property damage. For example, if poor design results in the ineffectiveness of an HVAC’s ductwork, professional liability insurance will cover the cost of redoing it. 

It’s important to note that if poor design leads to third-party injury or property damage, the cost of the injuries and property damage will be covered by general liability insurance. Professional liability insurance is still needed to cover the cost of correcting errors.

2. General Liability Insurance

Earlier, we discussed that some engineering professions have workplaces (or sites) near the general public. This is particularly true for civil engineers working on construction projects in a commercial area. Even for other kinds of engineering work, clients may regularly visit the project site to check on the progress. Additionally, suppliers and other partners may also visit the site from time to time. For this reason, engineering insurance needs to include general liability insurance. 

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 if your employees accidentally inflict damage on third-party property.

3. 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 reliable coverage for your employees if they sustain an injury, become ill, get disabled, or pass away 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.

An electrical engineer, who is protected by exemplary engineering insurance, checking some cables and wires

4. Property Insurance

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.

5. Commercial Vehicle Insurance

Engineers from firms regularly travel to project sites. If your company provides a fleet of vehicles for this purpose, then you need commercial vehicle insurance to cover you if your vehicles get into an accident and cause severe injuries or damage. 

Commercial vehicle insurance will help cover medical, repair, and replacement costs. This kind of insurance will also cover you if your commercial vehicle is maliciously vandalized or damaged. 

6. Cyber Liability Insurance

Most businesses these days rely heavily on technology. The downside to this is that cybercriminals are always finding ways to cash in. If 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 of 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 brokerage firms in Ontario. Our customer-centred approach enables us to put together engineering insurance policies that are tailor-fit for the needs of your business. 

If you need business insurance for your engineering company, we’d be happy to help you get started. We can also assist with your other insurance needs, such as negotiating premiums or following up on claims. 

Peace of mind and security for your business is only a few clicks away. Contact us today if you have questions or get started with a quick quote!  

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