Professional Indemnity and potential risks within Engineering
Engineers are an essential part of the development process for most businesses and individuals. Engineers are called upon to provide a professional opinion and perspective on new buildings and projects in addition to rectification and modification of existing buildings. Engineering services also extend beyond buildings with some engineers focusing on chemicals or mining as core areas of their expertise.
So within engineering, there are many diverse and individual risks that an engineer may face when delivering their engineering services either as an individual contractor or as part of a wider engineering team.
What risks do engineers face?
There are many unique risks that engineers face whilst undertaking their engineering jobs. Some of these may include:
- Claims of professional negligence
- Certifications that are wrong or inaccurate
- Project management mishaps or overruns and delays
- Poor design or lack of required detailed specification
Engineers work within a dynamic environment, with multiple stakeholders involved in projects and very often the best intentions may not go 100% to plan. So what should engineers do to reduce the exposure to the risks they face? Get sufficient insurance to meet their requirements and reduce their exposure to the risks they face.
The risks that an engineer is exposed to may be covered through an appropriate professional indemnity insurance policy. This professional indemnity insurance policy should align with their specific requirements and situation and around the types of engineering services they are offering.
An insurance broker with engineering experience or exposure to your specialisation is well placed to help secure the insurance you need to cover these risks.
Mandatory Insurance for Engineers?
The National Council of Engineers sets out the standards for engineers in regards to their professional indemnity and public liability insurance requirements.
Professional Indemnity insurance provides protection for businesses that provide professional advice or a specialist service.
Public Liability insurance provides coverage if a client, supplier or member of the general public is injured or sustains damage to their property when your business has been negligent.
Why are rates for professional indemnity for engineers increasing?
Insurance premiums both locally, in Australia, and globally are increasing as the insurance market hardens. Alongside the hardening market, there have been some significant local losses that insurers have faced in recent years that has reduced the premium pool of funds available to cover any future losses. As a result, the cost of insurance premiums, such as professional indemnity for engineers, maybe increasing to grow the premium pool required to cover the risks that are being insured. In addition, some engineers may be finding it harder to get insurance coverage for their specialisation or if they are able to secure insurance, to ensure that the levels of coverage are comparable to what they have had previously or what they may require. Achieving the same insurance coverage may require higher insurance premiums.
If you are operating an Engineering business, Urban Insurance can help to ensure that adequate Engineering professional indemnity insurance is in place to ensure your business is covered for all of its risks.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Channelle Ricketts.