Most business owners have a good understanding of traditional liability insurance plans. These plans cover general claims of negligence or wrongful actions made against you by anyone you interact with as a professional. A slip and fall case, for example, is a classic type of case covered by traditional liability insurance.
Professional liability insurance plans, on the other hand, cover negligent or wrongful actions you make as part of your business services. While many professionals need this type of insurance, engineers are especially at risk of costly court cases that result from small mistakes in their work. This blog post covers three common situations covered by engineering professional liability insurance plans.
1. Design Faults
Many engineers spend a significant amount of time and resources creating complex designs, blueprints, or programs for their clients. Whether you design physical structures or computer software, mistakes in the designs you create have the potential to cause harm to your clients. Buildings can collapse, causing physical harm to people and assets, and programs can breakdown, costing your clients thousands of dollars in potential revenue. These costly errors can be the result of small oversights or mistakes, but no matter how easy an error is to make, the resulting lawsuits could easily lead to bankruptcy. Professional liability insurance gives engineers a way to compensate their clients for any design faults and protects engineers from financial difficulty in the process.
2. Bad Advice
No matter how many years of professional experience an engineer has, they simply can't know everything about their field. Even an expert engineer can occasionally give a client bad advice. And while, ideally, each client would rely on the opinion of multiple engineers, many laypeople blindly trust engineers who have even a few years of experience.
Sometimes, bad advice simply results in a less-than-perfect end product. Other times, it can cost clients thousands of dollars and result in a lawsuit. When this happens, professional liability insurance companies often step in and protect engineers from the financial impacts of these lawsuits.
3. Broken Promises
Growing a business of any kind is a challenge. As a self-employed engineer gains more and more customers, keeping track of the needs of every project can become challenging. Occasionally, an important client's project may slip through the cracks. Some clients have projects involving tens or hundreds of professionals, so a late engineer could result in costly delays or a client being unable to deliver a complete project by a promised time. Since the engineer broke a professional promise, they could be liable for the financial damages created by their oversight. Professional liability insurance sometimes covers these cases, protecting engineers financially and professionally.