Professional indemnity insurance is an essential form of protection for engineers who require coverage for any legal and reputational loss or damage. It provides financial protection and can help an engineer’s career and practice to be safeguarded against unexpected circumstances, making it an important consideration for anyone who wishes to remain professionally secure.
As a professional engineer, one of the most important things you can do for your career is to make sure you are adequately protected against any legal or reputational damage that may occur. Professional indemnity insurance provides this protection and can help to safeguard your career and practice against unexpected circumstances. In this article, we will explain in detail the risks and benefits of having professional indemnity insurance, and why this form of coverage should not be overlooked.
Professional indemnity insurance (also known as errors and omissions insurance) is a type of liability coverage that protects businesses from claims made against them by customers, clients, or vendors for losses resulting from lawsuits arising out of the services provided by the business.
The scope of professional indemnity policies varies considerably. Some policies are very broad and cover any negligent act committed by an employee during his or her employment while other policies may be very narrow in scope, offering protection only for actions a business takes while performing a specific project.
Most professional indemnity policies will not protect you against any action taken while acting in your capacity — they typically only offer protection when acting on behalf of your business.
Areas Covered by Professional Indemnity Insurance
The following areas are covered by professional indemnity insurance. However, we shall be mindful of these areas as the insurance company that provide the cover would escape without safeguarding ourselves.
- Professional Negligence
There may be mistakes made by you during the designs are done. This will not be intentional. However, it could lead to failure or additional costs to the client. If you have the cover for this, you can claim the such cost from the insurance company.
- Loss of Project Document or Data
You are responsible for protecting the date of the project and you shall be held responsible for that.
- Loss of Goods or Money
- Unintentional breach of Confidentiality
- Unintentional breach of Copyright
There may be other areas that are to be covered in professional practices. Professional indemnity insurance is for safeguarding genuine practices and not for the pride of malpractices.
Do We Need Professional Indemnity Insurance
The answer is yes.
It is always advisable to have insurance to cover the above requirements discussed. However, it shall also needs to consider the work that we are involved in.
Since it is required to spend some money to get this insurance, and the amount we spend is a concern, we may not take the insurance for every work. Depending on the nature of the work and the risk involved with the particular work, the decision could be made as to whether it is required to have insurance or not.
Further, the amount covered by the insurance will always be a concern. Higher the amount we spend, the higher the coverage that we can obtain. Therefore, we have to be wise about obtaining this insurance.
Where We Can Get the Insurance
It can be obtained from the insurance company. It might not be issued by all the insurance companies. It is a special policy that is somewhat different from the other insurance coverage.
Sine is a different policy with different terms and conditions, it is doubtful to have it with all the insurance companies. You might check all the companies and the higher the insurance coverage and the low rate provided could be selected.
