Claims Retrospective: Covering Your Business-Related Risks
By Sarah A. Johnson, Esq.
While most engineers understand the importance of obtaining professional liability insurance, they often overlook the other risks inherent in running a business. Professional liability insurance only covers claims arising out of the engineer’s errors or omissions in rendering professional services.
Unfortunately, there are slews of other types of claims that can arise during the course of business. These claims often have nothing to do with the engineer’s services as a professional engineer but rather encompass the more mundane tasks involved with running a business, such as maintaining a physical office, employing people, running software, billing, and storing and conveying information, often electronically. If a claim arises out of these activities, it typically does not involve knowledge and training in the field of engineering, and thus will not be covered under a professional liability insurance policy.
Fortunately, there are other types of insurance available which provide coverage for a wide range of business risks and claims. For example, if the engineer maintains a physical office, there is potential liability for injuries sustained by others while at the office for which a commercial general or general liability policy would provide coverage.
If the engineer has employees, the engineer may consider obtaining coverage for both bodily injuries to such employee and/or other employment related claims, such as discrimination claims, via a worker’s compensation policy and/or an employment practices liability insurance policy, respectively. If motor vehicles are utilized in relation to the engineer’s projects, the engineer may consider buying business auto coverage.
Further, in this day and age, the use of computers, software, and the internet is inevitable in most businesses, which can lead to cyber-related liability from phishing, ransomware, and the like, for which an engineer can obtain a cyber insurance policy.
Sometimes, an engineer may be able to purchase endorsements or add-ons to their professional liability insurance policy that provide sub-limited coverage for some of these types of claims. Often, these endorsements or add-ons have low limits and/or provide only a defense for the subject claims. Nevertheless, they can be a useful way to protect against some limited potential liability.
However, depending on the nature and scope of the engineer’s business, he or she may wish to consider purchasing further policies in addition to their professional liability insurance policy. Engineers should carefully consider their business risks and discuss them with their insurance brokers to better protect against potential liability apart from professional liability.
