Engineering Business Insurance

In most cases, it's not a requirement to carry insurance to get your engineer license. However, your state's laws will determine if you do need coverage or not. What's more, some of your clients may ask for you to carry insurance as part of their contract terms.

In order to get an engineer license, you may need to complete some or all of the following requirements:

• Earn a degree accredited by the Accreditation Board for Engineering and Technology (ABET)
• Complete four years of supervised engineering experience
• Pass the Fundamentals of Engineering (FE) and Principles and Practice of Engineering (PE) exams

Also, you'll likely have to pay an application fee to get your license, as well as renew your license after a certain number of years have passed.

While not usually required by state law, engineering business owners should consider carrying general liability and engineer professional liability insurance as part of their risk management plan.

• General liability insurance is often the first policy engineers consider. It may be required to sign a commercial lease. General liability coverage can protect your business from accidental damage to a client's property or customer bodily injuries.
• Professional liability insurance, also known as professional indemnity or errors and omissions insurance, protects your business if a mistake in your engineering plans causes a financial loss to your client or if you're accused of not doing your job properly. This coverage will help pay for the legal defense costs during a lawsuit.

There are many significant risks and liabilities engineers and other design professionals are likely to face throughout their careers, including:

• Professional negligence: Should you fail to meet the expectations of a competent engineer (e.g., errors and omissions).
• Breach of contract: If you don't fulfill your contractual obligations.
• Misrepresentation: If you provide false or misleading information about your qualifications.
• Violation of codes and regulations: Should you not comply with building codes, safety standards, or other relevant regulations.
• Environmental liabilities: If your project is in violation of environmental code or causes a pollution incident.
• Product liabilities: If your product causes harm to a client due to a defect or improper warning.
• Public safety and welfare: Should you not prioritize safety within your engineering project.
• Intellectual property infringement: If you accidentally infringe on someone else's copyright, patent, or intellectual property.
• Ethical violations: Should your engineering business fail to meet standards of conduct and professional ethics.

Insureon's licensed agents can help you find the right, most affordable insurance coverage to meet your insurance needs and safeguard your business against these risks and major financial losses.

For complete protection from all liabilities and financial risks, your engineering firm may need the following additional types of insurance:

• License and permit bonds guarantee your business will complete a project in accordance with regulations and industry standards. Having a bond may be required to get a license, sign a contract, or obtain a project-specific permit. Unlike insurance, you must then pay that amount back to the insurance company.
• Commercial umbrella insurance provides additional coverage when the limit is met for claims made on a general liability, commercial auto, or employer’s liability insurance policy. Sole proprietors may need this protection to meet client requirements and higher liability limits.

Having the right insurance coverage can make a difference when undertaking certain jobs, protecting your business from financial risk, and building trust with your clients.