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Professional Liability Insurance

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coaleng

coaleng

Structural
Oct 1, 2014
7
I have just started my own structural engineering firm and the insurance companies are quoting $15,000 to $25,000 a year for professional liability $1M coverage. And most wouldn't quote me because my revenue projections were below $100,000. if this typical? I am the only employee.
 
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How many companies have you received quotes from? That does seem pretty high. Did you ask them why the premiums are this high?
 
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What kind of projects are you involved in?

Mike McCann, PE, SE (WA)


 
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I pay about a third of that in civil/site.

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East -
 
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When I started E+O was $3k/yr for $1MM coverage and $200k turnover. According to my broker, for structural engineers it should be 2.5-3.2% of turnover with a min of $3k premium.
-> Careful how you fill out your application form.
 
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I pay $15k-$25k, but I'm in Oil & Gas not structural/civil. All of the policies that I've looked at are $/$k gross revenue. If your gross revenue is below $100k then the quotes I've gotten have been the maximum $/$1k times 100. As gross revenue goes above $100k then the $/$1k number goes down (and is the percentage that Glass talks about). I've never had anyone not quote when my expected gross was below $100k.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
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I have only had three quotes. the local agents received quotes from Loyds London, Victor Schinnerer co., and Hull and co. I design foundations, steel structures such as coal preparation plants and conveying systems, some metal building foundations and forensic evaluations of steel structures. I was told by one insurance agent because "structural" was in the company name the quote would be higher than if I was just ABC engineering.
 
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Coal dust and forensics might be what is driving this high figure. Ask your broker further...

Schinnerer is usually pretty reasonable from what I have seen. I would expect high quotes from Lloyds.

Do you design in a high seismic area?

Mike McCann, PE, SE (WA)


 
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msquared: Is forensics considered to be high risk? I would not have assumed so, but maybe it is.

Coal sounds like a red flag to me. I think the Centralia mine fires, explosions, shoring failures, massive industrial accidents, etc.

Structural is a higher risk category than architecture, meaning you will pay 3% of net fee rather than 2%. 20% is way out of line. I have been insured through Hudson for the last couple of years, and before than Liberty Mutual.
 
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Ask Ron, but with forensics, I see a higher risk of potential involvement in litigation proceedings, whatever the type of involvement. Just guessing here...

Mike McCann, PE, SE (WA)


 
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Thank you all for the input. I will investigate further to see which items are driving this cost.
 
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coaleng...that's about in the ballpark. Depending on provider, I've paid between 15k and 25k.
I do mostly forensic evaluation; however, there are changes in my state's legislation that might make me re-think all of this. Morons in legislature!
 
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The geotechnical may be the trigger. Each time I'm asked to renew my policy, I'm asked if I do house inspections or geotechnical work.

Robert Billings
 
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We went through The Hartford, as another place to try.

B+W Engineering and Design | Los Angeles Civil Engineer and Structural Engineer
 
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Depending on the type of work you do, I recommend getting quotes through the ASCE program. The quotes we received were nearly half of quotes we got from other carriers. Its insured through Lloyd's of London, but I believe a special rate through ASCE.

Dont need to be member to get a quote. Do need to be one to purchase.
 
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