Consulting Engineers Professional Indemnity Insurance
As an Engineer or Engineering Consultant you need to have adequate Professional Indemnity Insurance in place to protect you against potential claims from clients for financial loss as a result of your professional negligence. It is highly likely that either your professional body/association or the contracts and projects that you are involved in will require you to have professional indemnity cover in place.
We understand the wide scope of work that Engineers can be involved in and can help you to arrange cover to suit your individual requirements. We deal with the UK’s leading professional indemnity insurers to make sure that we offer cover specific to engineering consultants at the most competitive premiums. You can get an immediate quotation online or via our office:
or Contact our Advisors
Email us: firstname.lastname@example.org or call us on 01270 252 252 to deal with one of our Advisors. If you need any other insurance cover for yourself or your business we can help with that too.
Example trades we can provide professional indemnity insurance for
How do Professional Indemnity Insurers view the Engineering Profession?
There are many variations of engineering, (chemical, civil, mechanical, electrical, electronic, structural, soil and geotechnical to name but a few), which apply to different areas of design and construction. Engineering encompasses any type of activity which aims at either solving a problem, or completing a task, related to the definition, design and specification of a product.
Our delegated authority scheme can cater for most Consulting Engineer risks allowing us to quote quickly.
What do Insurers look for?
As with other traditional professions, insurers will look for a combination of qualifications and experience. If a consultant is unqualified the Insurer will want to see a CV. Insurers will analyze a breakdown of the fee income into the following common categories:
Civil Engineering. Medium hazard. The oldest branch of engineering. Design and supervision of the construction of roads, airports, tunnels, bridges, water supply and sewage systems and buildings. They employ the latest concepts in computer-aided design (CAD) during design, construction, project scheduling and cost control.
Civil Engineers are problem solvers, meeting the challenges of pollution, the deteriorating infrastructure, traffic congestion, energy needs, floods, earthquakes, urban redevelopment and community planning. Each project is custom designed. Qualifications and relevant experience are essential.
Structural Engineering. Medium hazard. Structural engineering is the science and art of designing and making buildings, bridges, frameworks and other structures so that they can safely resist the forces to which they may be subjected.
Soil and foundation work. Higher hazard. The potential consequential loss has produced some of the largest paid claims in this class. By definition things tend to be built above the work done by the soil and foundation engineer, therefore, if this work is wrong the entire project may be damaged.
Mechanical. Lower hazard. This is an engineering discipline that involves mechanical design, energy conversion, fuel and combustion technologies, heat transfer, materials, noise control and acoustics, manufacturing processes, rail transportation, automatic control, product safety and reliability, solar energy, and technological impacts on society.
They study the behaviour of materials when forces are applied to them, such as the motion of solids, liquids, and gases, and the heating and cooling of objects and machines. Using these basic building blocks, engineers design space vehicles, computers, power plants, intelligence machines and robots, cars, trains, airplanes, furnaces, and air conditioners.
Mechanical Engineers work on jet engine design, submarines, hot air balloons, textiles and new materials, medical and hospital equipment, refrigerators and other home appliances. Anything that is mechanical or must interact with another machine or a human being is within the broad scope of the mechanical engineer. The work of mechanical engineers varies by industry and function.
Large numbers of mechanical engineers do research, test, and design work while others work in maintenance, technical sales, and production operations. High technology companies seek mechanical engineering graduates for product design applications such as; plastic enclosures, thermal analysis, and electromechanical.
Electrical. Lower hazard. Electrical engineers design new products, write performance requirements, and develop maintenance schedules. The usual functions in electrical engineering include research and development, planning, designing, construction, operating, and maintaining a variety of electrical apparatus and systems. They also test equipment, solve operating problems, and estimate the time and cost of projects.
Heating and Ventilation. Lower hazard. Usually low contract values with a good claims record. However specialists undertaking work in temperature sensitive areas such as computer rooms, food storage units may be charged penalty rates.
Any form of survey or valuation work. Higher hazard. Needs specialist qualifications. Details of average and largest values needed. Engineers would rarely carry out surveys for lending purposes but are far more likely to do a condition survey as part of a job. It is unusual for a condition survey to be carried out in isolation unless the job is then aborted which would be of little risk to insurers.
Other areas of interest for underwriting purposes include:
- Contract sizes.There is a direct relationship between the size and complexity of the job and the exposure.
- Technology. Is the firm using ‘cutting edge’ technology or standard, tried and tested processes?
- Overseas exposure. Does the practice carry out work for overseas clients? Careful consideration would be paid to such work carried out for US or Canadian clients.
- Retroactive exposure. Does the practice have an exposure to claims arising from past work, whether in the current firm or a former practice?
Civil works to Embankment. Collapsed due to unstable sub-surface conditions not being detected by Geotechnical engineer.
Counter Claim from Client following pursuit of unpaid fees. Client alleges misleading estimated costs of project. A typical tactic used by clients’ to delay paying fees or reduce fees.
Design of Highways and Service Roads on £2,000,000 superstore project. Failure to locate previous pilings in the area and insufficient access allowed for articulated vehicles. £80,000 remedial costs.
Design of heating system in factory. Refurbishment proved inadequate following miscalculations. Extra units required costing £29,000.
Proceedings issued for breaches of Building regulations. Against nine parties on the contract. Scattergun approach used by solicitors which will incur costs.
Engineer provided wrong specification for electricity supply to site contractors. Alterations and temporary generator required £28,000.
Specification and supply of ‘Load Cells’ within a definite accuracy for testing purposes. Cells found to be under performing and eventually rejected. Cost £42,000.
Refurbishment of Noise test facility, contract terminated citing delays due to design inadequacies. Requiring complete refabrication to comply with Pressure Equipment Regulations 1999 claiming £1,500,000.
Main Bodies with Professional Indemnity Rules
The Institution of Electrical Engineers (IEE).
Represents the public, professional and educational interests of over 140,000 electrical, electronic and manufacturing engineers worldwide.
The Institution of Civil Engineers (ICE).
With a 70,000 – 80,000 membership ICE seeks to advance the knowledge, practice and business of civil engineering, to promote the breadth and value of the civil engineer’s global contribution to sustainable, economic growth, and ethical standards, and to include in membership all those involved in the profession.
The Institution of Mechanical Engineers (IME).
The UK’s qualifying body for mechanical engineers. The organisation represents around 82,000 engineers worldwide and has a specific Automobile Division with 18,000 members and 11 UK regional centres.
Society of Automotive Engineers (SAE).
Provides a one-stop resource for technical information and expertise used in designing, building, maintaining, and operating self-propelled vehicles for use on land or sea, in air or space. SAE has a membership network of nearly 80,000 engineers, business executives, educators, and students from more than 97 countries who share information and exchange ideas for advancing the engineering of mobility systems.
The Chartered Institution of Building Services Engineers.
There is no requirement made by these professional bodies for their members to hold or maintain professional indemnity insurance cover at any level. However, the need for such cover is obvious and most professional engineers recognise this.
In addition, most engineers find that they are required to hold and maintain cover to comply with contractual requirements such as collateral warranty agreements they are being asked to enter into as a condition of being awarded new contracts.
Professional Indemnity Wordings
Wordings are usually offered on a standard engineer’s civil liability wording, often similar to that offered to architects. If the insured is unqualified, or qualified only to a limited extent, cover may only be offered on a more basic miscellaneous errors and omissions wording.
Professional Indemnity Usual Cover
Usually the limit of indemnity will be “any one claim” with legal costs payable in addition. Sometimes the cover will be limited in the aggregate. The excess will normally not apply to insurers’ costs and expenses but again this can be amended to include costs and expenses.
The Usual Exclusions
- Death or bodily injury.
- Loss or damage to physical property (but fidelity and loss of documents are covered).
- Punitive or exemplary damages (many policies have no geographical or jurisdiction limitations).
- North American offices.
- Liability to other insured’s .
- Nuclear risks.
- Claims and circumstances known at inception of the cover.
- Acting as contractor.
- Onerous collateral warranties.
- Associated Links
The Institution of Mechanical Engineers (IMechE)
The Institution has been the home of Mechanical Engineers for 150 years. Around 83,000 engineers world-wide are members.
Institute of Civil Engineers (ICE)
The ICE is an independent engineering institution. It was established in 1818, and today represents over 80,000 professionally qualified engineers worldwide and the civil engineering industry.
The Engineering Council (UK) [EC(UK)]
EC was created on 22 March 2002. It is a direct successor of the chartered institution first established in 1982 to promote and regulate the engineering profession in the UK.