Which Business Insurance is Best for Architects and Engineers?

May 15, 2013

Is general liability insurance what you need?  Or is a professional liability policy the way to go?  Let’s explore…

Practically any business benefits from having a general liability insurance policy.  But some professions run a higher likelihood of really needing to use their insurance, chief among them architects and engineers. General liability insurance protects your business from third party claims for bodily injury, associated medical costs, and damage to others’ property.  It also covers  if your  clients allege that you  caused them bodily injury or property damage.  You’ll be very happy you have GL insurance if, for instance, your employee badmouths a client to a contractor on a job site, the client learns of this, and sues for slander.

Is general liability insurance what you need?  Or is a professional liability policy the way to go?  Let’s explore… Then there’s professional liability insurance, which covers you in instances involving negligence, even if you haven’t made a mistake.  Professional liability insurance coverage is invaluable if, for example, a designer misinterprets your renderings, orders a boatload of un-usable materials, and your client tries to stick you with the cost before suing you for negligence. As an architect or engineer you likely believe that your risk for these kinds of lawsuits is low, and you’re correct.  But in your line of work many clients require you to carry a general liability insurance policy, which is reason enough to research rates and get a policy.  And you probably visit clients’ offices and construction sites, both of which open the door to accidents. The Architectural Record sums it up nicely:

Professional liability insurance is coverage that protects an architectural firm and its employees against claims alleging negligent acts, errors, or omissions in the performance of architectural services.  This is different from commercial general liability, or CGL, insurance, which covers the types of accidents or property damage that could happen at any business.  CGL policies are relatively standard regardless of the type of business and usually exclude professional liability claims.  In contrast, professional liability policies are as specialized and diverse as the variety of professional practices that exist.

Protect your specialized area of practice with policies designed expressly to meet your business insurance needs.