Engineers Professional Indemnity Insurance
Engineering advice can have significant physical and financial consequences when relied upon, and is rarely questioned until something moves. A structural calculation, a foundation design or a temporary works scheme either holds or it does not, and when it does not the consequence tends to be physical, immediate and serious.
The discipline matters to the underwriting. Structural and civil work carries the collapse exposure, geotechnical work carries ground risk that is inherently uncertain, and mechanical and electrical work carries a different profile again, centred on performance, commissioning and fire safety systems.
Temporary works deserve separate mention. Propping, shoring, formwork and excavation support are designed to be removed, which means they can present particular documentation and risk-management challenges, and the consequences fall on people working alongside them.
We can advise engineering consultancies, from a sole practitioner to a multidisciplinary firm, on professional indemnity, CDM designer duties and the run off that design liability makes necessary.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Calculation and design error
An error in loading, specification or detailing that leaves a structure inadequate. It may be discovered during construction, which is expensive, or after occupation, which is worse because remedial work then happens around people using the building.
Ground conditions and geotechnical assumption
Foundation design rests on investigation that samples a fraction of the site. Where actual conditions differ, the claim is often framed as inadequate investigation or unjustified assumption, and the cost of remedying foundations is rarely small.
Temporary works failure
Propping, shoring and excavation support fail during construction, when people are working next to them. Because the works are temporary, the design is sometimes less rigorous and the checking less formal, which is precisely why insurers ask about the procedure.
CDM designer duties
Designers have statutory duties to eliminate and reduce risk, and to provide information about residual risks. A failure here is a regulatory matter as well as a claim, and it is examined after any serious site incident.
Fire safety engineering
Where a practice provides fire strategy, smoke control or compartmentation advice, it attracts the same restricted market as cladding work. Insurers treat it as a distinct and heavily scrutinised exposure.
The cover we arrange
We arrange professional indemnity and related insurance around the services you provide, the clients you work with and the contractual requirements you face. The appropriate cover and limits will depend on your individual activities and the terms available from insurers.
Professional indemnity
Claims arising from negligent design, calculation, specification or advice. Written on a claims made basis with a retroactive date, which on engineering work needs to reach back across the practice's whole history.
- Negligent design and calculation
- Specification and advice
- Claims made, with retroactive date
- Defence costs, often in addition
Temporary works design
Cover for schemes designed to be removed: propping, shoring, formwork and excavation support. Worth confirming explicitly, since some wordings treat it differently from permanent design.
- Propping and shoring schemes
- Formwork and falsework
- Excavation support
- Check it is not carved out
Run off
Cover continuing after the practice ceases. Engineering liability has the longest tail of any profession on this hub, because a structure stands for decades and the Building Safety Act extended what can be claimed on.
- Continues after the practice ceases
- Long tail exposure
- Commonly six years or more
- Planned before closure
Public and employers' liability
Injury and damage arising from the practice's activities, particularly during site attendance, inspection and testing, together with cover for employees.
- Site attendance and inspection
- Damage to client property
- Employers' liability, legally required
- Limits typically £5m or £10m
Cyber and data
Models, calculations and project data represent years of work. Ransomware that encrypts a live model, or loss of the record of how a design decision was reached, is a serious operational and evidential problem.
- Loss of models and calculations
- Ransomware and restoration
- Business interruption
- Evidence of design decisions
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Disciplines practised: structural, civil, geotechnical, mechanical, electrical, fire
- Fee income split across those disciplines
- Largest project by construction value, and the largest structure designed
- Whether temporary works are designed, and the checking procedure used
- Whether any fire engineering or external wall advice is provided
- Checking and review procedures, including independent category three checks
- Appointment terms, liability caps and net contribution clauses
- Claims and notified circumstances over the last six years
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Discipline and structure type
Structural and civil work on buildings is rated above building services work at the same fee level. Bridges, retaining structures and anything where failure is sudden attract the highest rates.
Project values relative to fee
Insurers look at the construction value the advice influences rather than the fee earned. A modest fee on a large structure carries an exposure well beyond the income it generated.
Checking procedures
Documented independent checking, proportionate to the consequence of failure, is the strongest evidence of control a practice can present, and it is reflected in terms.
Claims and circumstance history
Notifications matter as much as paid claims. On engineering work a notified circumstance may sit open for years before resolving, and insurers rate the uncertainty.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Fire safety advice
Fire strategy and external wall work attract the same restrictions as in architecture. Where a practice provides it, the terms need reading closely; where it does not, that should be stated clearly at presentation.
Fitness for purpose and performance guarantees
Professional indemnity answers a failure of reasonable skill and care. An appointment promising a specific performance outcome creates an obligation beyond that, and it is generally uninsured.
Work before the retroactive date
On a profession whose liability runs for decades, a retroactive date that does not reach the start of practice leaves the earliest and often the largest projects outside cover.
Contractor's own workmanship
Professional indemnity covers the design, not the building of it. Where the design was sound and the execution was not, the claim belongs to the contractor, though both are frequently pursued together.
Common questions
Does our policy cover temporary works design?
It should, but check rather than assume. Some wordings treat temporary works differently from permanent design, and it is the area where failures are most likely to injure someone, because people work alongside propping and shoring while it is in place.
What limit of indemnity do engineers need?
It is driven by the construction value your advice influences rather than your fee income. A practice earning modest fees on large structures carries an exposure far beyond its turnover, and client appointments frequently specify the limit in any case.
How do CDM duties interact with insurance?
CDM imposes statutory duties on designers to eliminate and reduce risk and to inform others about residual risks. A failure is a regulatory matter as well as a potential claim, so cover for representation at investigations is worth having alongside the indemnity itself.
Why is the retroactive date so important for engineers?
Because structures last decades and claims arrive late. If your retroactive date is ten years ago but you have practised for thirty, the work most likely to produce a serious claim is the work furthest outside your cover.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.