Professional Liability Insurance
Professional Liability Insurance
(OP)
In anticipation of doing some consulting in the near future I have applied for Professional Liability Insurance (PLI) but I don't expect a response for a week or two. Meanwhile I'm trying to estimate the cost for putting together my rates. I have a few questions for the forum.
1. Is it typical for consulting engineers to be required to carry PLI insurance and is it typical for them to have to pay for it, rather than falling under an umbrella policy of the company requiring it?
2. What kind of cost would be typical for a $500,000 or $1million dollar PLI policy?
3. Is anyone aware of any laws requiring such insurance or is this just up to each hiring company individually?
4. It's my understanding that this is the same thing as E&O (errors & omissions) insurance. Anyone agree or disagree?
Any input would be appreciated.
1. Is it typical for consulting engineers to be required to carry PLI insurance and is it typical for them to have to pay for it, rather than falling under an umbrella policy of the company requiring it?
2. What kind of cost would be typical for a $500,000 or $1million dollar PLI policy?
3. Is anyone aware of any laws requiring such insurance or is this just up to each hiring company individually?
4. It's my understanding that this is the same thing as E&O (errors & omissions) insurance. Anyone agree or disagree?
Any input would be appreciated.
Talk To Other Members
RE: Professional Liability Insurance
1. Yes, and if you have it, you have to pay for it. Many clients require it as a condition for doing work for them.
2. Can't really help here - too many variables. You can purchase project-specific insurance which will cost less, or a blanket policy that covers all your work. If your firm is involved in any geotechnical work, costs will be MUCH higher. Electrical is generally not a high risk area.
3. Not required by law any where that I am aware of, but there may be individual states that require it.
4. Yes, "E&O" and Prof. Liability are generally used interchangeably.
I haven't checked for a long time, but years ago there were only two underwriters writing Prof Liability policies. You might check the NSPE website for further help on liability insurance, or give your local state branch a call.
Good luck.
RE: Professional Liability Insurance
Most PLI companies offer discounts if you have attended classes held by DPIC and passed their tests. The have lots of guides and books as well.
I think consulting such a company is imperative for you and anybody in the consulting business.
RE: Professional Liability Insurance
RE: Professional Liability Insurance
You should carry the amount of coverage for size of the projects. if the buildings you design are worth 2 million dollars, then you need 2 million dollar coverage in case the building has a fire. The fire damage may have been partly caused by a bad electrical design or a part you approved.
Some of my clients require it some don't. I carry it so I will not lose everything I own and any future money I make.
If you work for some company don't stamp anything unless they cover you with this insurance or get a letter of indemnification for your work from them.