Exposure to loss and liability claims for professional engineers typically come from the bottom of a lawsuit related to the contract. While all professionals will face a claim or potential harm from the criminal liability standpoint, it is important to have some type of protection that is usually covered by a professional liability policy.
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The level of risk varies depending on the type of engineering work that is being done. An electrical engineer who designs electrical systems for buildings typically have less exposure and thus less the premium paid for professional liability insurance as compared to a structural engineer.
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Some risk control techniques that engineers can use to limit their exposure to loss are as follows:
1. Have formal written policies and procedures for the workflow and risk evaluation.
2. Maintain adequate details and a complete record of all the projects, consultations and meetings with clients.
3. All orders or modifications changes must be made in writing by the appropriate sign off of all the parties affected by the project.
Engineers need to be careful about the insuring agreement. Sometimes insurance carriers exclude joint ventures and partnerships and other entities and only cover the named professionals. Having the ability to have an insurance policy that can cover the past, present and future claims is very important for the engineers and their companies.