Five Common Misconceptions about Structural Engineers Insurance
Perhaps more than any other discipline in the engineering field, structural engineers face the most risk – especially when it comes to buildings under construction. If a structure is damaged due to peril, one of the first questions asked is whether the design of the building contributed to the damage or failed in some way to mitigate the damage. Unfortunately, that question can often be asked during the course of a lawsuit, whether it’s warranted or not.
Structural Engineers Insurance provides errors and omissions coverage to address the risks faced specifically by structural engineers. At ALIGNED we work with the top professional liability insurance companies in Canada including Victor, which has been endorsed by both the Association of Consulting Engineering Companies Canada and Engineers Canada since 1969.
In this post, we cover five of the most common misconceptions that we at ALIGNED have come across in the years that we’ve been brokering Structural Engineers Insurance for structural engineers. We’ve also highlighted some of the coverage benefits that come with a Structural Engineers Insurance policy. For information on other coverages that structural engineers should carry, please visit our Understanding Architects & Engineers Insurance in Canada page.
Five Common Misconceptions Structural Engineers Have about Structural Engineer Insurance
Q. I work independently and only do small jobs / I’m only running a side structural engineering business, and I haven’t had any issues. Do I really need Structural Engineer’s Insurance?
A. There are a couple of issues to be addressed here. First, as you are all too familiar with as a structural engineer, issues with design may take years before they show themselves. Cracks in walls and foundations due to the building design may have already begun but won’t be noticed by the occupants until obvious signs start appearing on the interior of the structure. Fortunately, some of the Structural Engineer Insurance policies ALIGNED Insurance Brokers negotiate can include fully retroactive coverage to protect against previous errors and omissions.
Second, a Structural Engineer Insurance policy available through ALIGNED can be customized to fit any size structural engineering firms and for any workload/project amount. So whether you have a part-time structural engineering business or you run a multinational engineering organization containing multiple disciplines – including structural engineering – ALIGNED will only get you the coverage you need to ensure that your liabilities are covered.
Q: I / my structural engineering company mainly focuses on inspections and does little-to-no design work so we don’t have that much liability and therefore don’t need Structural Engineer Insurance.
A. As the inspector in a structural engineering capacity, you still carry the risk of being named in a lawsuit if a client/project owner suffers a loss. With litigation the way it is, plaintiffs are encouraged to name any and every party who may bear even the slightest responsibility for their losses. Simply being named in a lawsuit puts you/your firm on the hook for legal fees to defend yourself against that lawsuit. Those fees will add up quickly whether you are innocent of the allegations or not. Structural Engineer Insurance policies can include defence costs in excess of the Canadian limit and first dollar defence coverage worldwide. More details on the coverage features of a Structural Engineer Insurance policy provided through an ALIGNED Advocate are listed in the “Features of a Structural Engineer Insurance Policy” section below.
Q: The structural engineering work that I / my organization does is non-residential and therefore lower risk so Structural Engineer Insurance isn’t a necessity in my/our case.
A. This misconception is similar to the ones above so the answer is also similar: no matter in what capacity or specialization you work as a structural engineer, there are always risks inherent in the work you do simply by the nature of design and engineering work. Regardless of who your clients are, an error or omission in your services could start a chain reaction of events that leads to losses on multiple fronts. Those losses to your clients can include personal injury, lost revenue, temporary workspace costs, damaged or destroyed inventory and damaged or destroyed machinery and equipment, to name a few examples. Again, Structural Engineer Insurance policies are designed to protect you from potential financial disaster regardless of your niche in the structural engineering field and, through an ALIGNED Advocate, will be tailored to your specific business needs.
Q: I’ve shopped around for Structural Engineer Insurance and was told that the minimum coverage they offer is $1M. I don’t need that much coverage.
A. Structural Engineer Insurance policies that we provide are available on both a per claim or aggregate basis and include the following limits:
- $250,000/$500,000
- $500,000/$1,000,000
- $1,000,000/$1,000,000
- $1,000,000/$2,000,000
- $2,000,000/$2,000,000
It is also important to carry Structural Engineer Insurance coverage for more than the value of the structure being designed because, as mentioned above, risks and losses are unpredictable and can easily add up to a total dollar amount far greater than the value of the structure itself.
Q: I / my structural engineering company doesn’t need Structural Engineer Insurance because the project owner has insurance which means I’m/we’re covered.
A. This is simply not true. In our experience, the project owner’s policy will not cover errors and omissions by a structural engineer. In fact, for larger projects, project owners will only take bids from structural engineers with Structural Engineers Insurance because they are also looking to protect themselves from potential litigation that could bankrupt their companies. If you ever encounter a situation where you are told that you are covered under someone else’s policy, it is important to be skeptical to the point of asking to review that policy to ensure that this is in fact true and to be aware of any limitations or exclusions that leave you unprotected.
Features of a Structural Engineer Insurance Policy
The following are some of the features that are available in a Structural Engineer Insurance policy available through ALIGNED. This is a partial list. For more features and information on how to apply for Structural Engineer Insurance, visit our Understanding Architects & Engineers Insurance in Canada page. Those features can include:
- Policy limits can be purchased on an annual basis or for a three-year policy term
- No deductible for qualifying risks
- Punitive and exemplary damages coverage, where allowed by law
- Design-build coverage
- Pollution liability insurance coverage
- Occupational Health and Safety Act expense coverage with a $25,000 sublimit
- Loss of documents expense coverage with a $25,000 sublimit
- Guaranteed annual premiums for the policy term
Again, these are just some of the coverages available with a Structural Engineers Insurance policy. For the full list, go to our Understanding Architects & Engineers Insurance in Canada page or contact an ALIGNED Advocate.
ALIGNED – Business and Structural Engineer Insurance Experts
At ALIGNED, we’re well aware of the unique risks that structural engineers face and are experts at getting you protected with the Structural Engineer Insurance policy that works for you. Contact us for a free, no-obligation quote tailored to your specific structural engineering business.
