An engineering consultant is a professional adviser who with his due diligence and reasonable skills provides assistance in engineering projects. Errors and omissions are part and parcel of professional services and Professional Indemnity Insurance (PLI) help you get covered against negligent acts, error or omission etc. In engineering projects, there are high chances of design or structural defects, low-quality production, measurement errors, copyright infringement claims etc which can lead to reputational damage and financial losses.

Giving wrong advice or incorrect information can invite lawsuits from your clients. Be it a small project or a large firm, a slight negligence might result in project delays or breach of contract and invite negative results for a professional. In order to protect yourself from such claims, you should consider buying errors and omissions (E&O) insurance policy which is also known as professional indemnity insurance or PI Policy. If you as an engineering consultant do not conform to industries standards and serve unprofessionally, you will be held personally liable for professional negligence. It is the duty of a consultant to protect the interest of the client and provide services with professional care. No matter, if you are a mechanical engineer or a software engineer or an electrical engineer, you are personally liable for your professional actions and services.

Read About: How Is Indemnity Defined Under Professional Indemnity Insurance?

For instance, as a mechanical engineering consultant, you suggested a dye machine with the wrong measurement which resulted in design defect and the whole lot of production goes waste. In such a case, the engineer is held liable for his incorrect decision. It is important to buy professional indemnity insurance as lawsuits are increasing day by day against professionals. Professional indemnity or liability insurance will cover you against all such claims resulting from negligent work and any errors while performing the duty. Intentional faults are, however, not covered under errors and omissions insurance. Professionals should take all precautions to avoid apparent emerging probable loss.

Case: A civil engineer consultant has got a contract for designing a smart city. The contractor provided all the requirements and specifications regarding the design and structure of the building but the civil engineer consultant did not follow the specifications and also made a decision to use medium grade quality raw material and it poses a big problem for civil engineer consultant. He has been sued by the contractor and was asked to pay for the losses incurred. In this case, the civil engineer consultant will have to bear the financial repercussions for the errors he has committed, as he didn’t buy professional indemnity insurance so he has to fight the court case and pay litigation cost by himself. His reputation has also been traded negatively in the market because of such mishap. In such cases, if professional indemnity insurance would have been bought by the engineering consultant, all the cost would have been borne by the insurance company. Error and omission insurance or PI insurance policy offers financial protection to a professional when he does not serve in accordance with the employer’s requirement.

Also read: Is Professional Indemnity Insurance Worth It?

It becomes important for every professional to have professional indemnity insurance to attain peace of mind and sense of security in order to perform professional services confidently. Safeguard your business services from litigation cost incurred against error or omission or negligent claims. An engineering consultant firm might face claims against defects in designs, breach of contract, delay in work, providing wrong advice or incorrect information which resulted in high-cost expenses or increases the production cost. Do not get worried about such claims and perform your professional services with a greater sense of confidence as professional indemnity insurance is available to handle such claims.

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