Exploring E&O Insurance And Why Engineers Need It

Engineering is a profession that has a very broad field, with innumerable disciplines and sub-disciplines associated with it. The field of engineering applies science to design and development to ensure a practical end. There are many types of engineers, which are way to many to mention them all. When overviewing the engineering profession, there are many job duties attached to it, making the engineer’s job extremely difficult. There will always be risk of failure and errors, which is why engineers need to be covered with errors and omissions insurance in Ontario.

Resolving System Malfunctions

Engineers are responsible for overseeing the installation of different types of systems. This could be a commercial heating and air conditioning system or a steam system. Many times the engineer will oversee the process, without hands on experience. This basically puts the engineer in a compromising position, because they leave the manual labor in the hands of a contractor. Not only does this make the engineer’s job even more risky, but also it puts them at a disadvantage, especially when working with a contractor they are unfamiliar with.

If the client is left with a financial loss, linked to an error or negligence, because of something the contractor or engineer did incorrectly, the engineer will be responsible for reimbursing these losses. This is where errors and omissions insurance coverage comes into play. The policy will cover defense costs, settlements and judgments, so the engineer does not have pay out of pocket and risk losing their business.

Working Multiple Projects

Most engineers find themselves working on multiple projects simultaneously. It can be extremely difficult to oversee multiple projects, without experiencing a mishap. The engineer’s job duties are very extensive, requiring intricate details of designs and applications. One little error could potentially cause a huge catastrophe, which would be devastating for both the engineer and their client. The only way to protect your self is with E&O insurance.

engineer liability insurance

Understanding The Definition Of Error And Omission Insurance

As an engineer, you probably already know that business liability insurance covers any financial losses due to property damage, bodily injury, or advertising injury, but what type of insurance covers the customer in the event that your work is not performed as guaranteed? This is what error and omission insurance does and it is also sometimes referred to as professional liability insurance.

Error and omission polices can cover anything from defense, settlement, and judgment costs. Even if you are forced to appear before a court of law and are found not guilty, you will likely incur thousands of dollars in court costs and lawyer fees. For smaller companies and engineering firms, this can completely bankrupt them. Simply put, error and omission insurance policies cover you in the event that you do something to cause your client to suffer financial losses.

When You Need To Purchase Error And Omission Insurance

When it comes to buying any type of insurance policy, the best time to purchase is before a risk is taken. As an engineer your designs are expected to stand up the test of time, but you know all too well that one little miscalculation can throw the whole project off. For instance, if you are going to be designing a heating and air duct system for a large corporation in Ontario, it would be best to acquire error and omission insurance, before the work is started. The reason for this is because if you are not covered at the current time, but purchase a policy after a problem was reported, the incident will not be covered under the policy.

Even if you currently possess the coverage, any work that you did before the initial coverage start date, will not be covered under the policy. This insurance is also a great selling point. Customers that understand E&O insurance and know that you have this type of coverage will feel more comfortable with hiring your company.

Fraudulent Claims

All service providers are at risk of fraudulent claims. While there is no way to avoid these claims, you can protect your business with errors and emissions insurance. Any client that you have conducted business with in the past and present can file a claim with the engineer’s insurer. When the claim is received the insurer will immediately contact the engineer to make them aware of the claim and see how they want to proceed. It is always in the engineer’s best interest to fix the problem, but this is not always possible, since there are some situations that are more complex.

It is important to note that a client can hire a lawyer to represent them at any time. If the issue is not resolved in a timely manner, there is a good chance that the complainant will file a lawsuit against the engineer. If the engineer is covered under an E&O insurance policy from an insurance company in canada, they will be able to rest a little easier, since the policy will cover the judgment, settlement and defense costs.

 

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