Buy Electrical Engineering Insurance

Electrical engineering insurance is a type of insurance designed to protect electrical engineers and their businesses from financial losses caused by professional errors or omissions, third-party claims, and other risks associated with their work.

This insurance covers a range of activities, including design, construction, installation, and maintenance of electrical systems.

It provides protection against claims arising from errors or omissions in design work, project management, and supervision of contractors and subcontractors. Electrical engineering insurance also covers the cost of defending against lawsuits and the payment of damages awarded.

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small electrical engineers ranges from $37 to $49 per month based on location, size, payroll, sales and experience.

These are the types of electrical engineering insurance policies you should consider taking to protect yourself and your business as an electrical engineer:

Professional Liability Insurance: This electrical engineering insurance protects you against claims of negligence or any professional mistakes which may lead to your clients losing money. The cover extends to any errors and omissions related to advice you provide as well as in your designs and specifications.

Professional indemnity insurance for electrical engineers will provide for any compensation awarded or negotiated as well as any legal fees accruing from the proceedings.

Commercial General Liability Insurance: With a general liability insurance policy, you and your firm are protected if a member of the public or your clients suffer bodily injury or property damage because of something which can be traced to your business.

In the case of a electrical engineer, the damage or injuries can be traced to a number of possible causes including electrical installations or the use of equipment and tools. The electrical engineering insurance policy will pay for any compensation and also legal fees incurred by the claimant if they are successful in proving the case.

Workers Compensation Insurance: If you have employees working in your firm, then the law in most states mandate that you buy workers comp for any non-owner or partner employees. This coverage protects your legal liability with respect to bodily injury, accidental death or disease of any employee which may arise in the course and as a result of their employment in your official business.

Workers comp extends to all forms of electrical work being undertaken and any other supplementary work being undertaken including building work or transportation of materials and equipment.

Commercial Property Insurance: Business or commercial building insurance policies provide cover for the buildings as well as fixtures, furniture and fittings. Some policies also extend to interruptions due to reasons such as fire, floods or forced entry in which case the insurer will make up the shortfall in your income.

ANSWER: Yes, it is possible for a client to sue an employed engineer and not necessarily their employer. For instance, if an engineer allegedly performs a service negligently, the person claiming to have suffered harm as a result of the negligent action has the option of suing either the individual engineer or the employer/firm.

Whichever the case, the question of who signed or sealed the drawings, plans or specifications pertinent to the project where the negligent action happened is not considered as relevant to the issue of who is responsible for the negligence.

The courts are more concerned about establishing if the person (engineer or firm) owed a duty to the individual/individuals who suffered damages and whether the engineer/engineers breached that duty and therefore caused the damages in whole or in part.

ANSWER: When you are buying your electrical engineering insurance policy for your business, the insurer will naturally ask for details such as business address, type of trade as well as your current or projected turnover. The insurer may also inquire about the business structure of your electrical engineering firm (i.e. whether you are in a sole proprietorship, partnership, limited liability company or corporation).

However, they are unlikely to require you to provide the actual business registration details. As such, it is generally possible to get an electrical engineering insurance policy while you are still doing the paperwork for setting up your firm.

ANSWER: Strictly speaking, none. The terms errors and omissions insurance and professional liability insurance usually refer to the same type of policy. Of course, you may find that one insurer chooses to use one of the two terms while another opts for the other and that the extent of the coverage differs from one to the other.

However, both policies will essentially protect you against the cost of compensation claims when a client believes you made a mistake or were negligent in the conduct of your business, leading to damage or losses.

ANSWER: Yes. Professional indemnity insurance is tax deductible in most states. All forms of business insurance are considered as "allowable expenses". This means the cost of the policy and premiums is an expense you can deduct you can calculate your taxable profits.

As you calculate your taxable profits for your tax returns you can deduct business expenses from your income. The term allowable expense extends to such expenses as traveling costs, legal and financial costs including the premiums you pay for your business.

Electrical engineers, like other professionals, can face lawsuits due to various reasons. Some of the common reasons include:

Negligence: If an electrical engineer's work results in damage, injury, or loss due to oversight, mistakes, or carelessness, they can be held liable for negligence.
Insurance protection: Professional liability insurance, also known as errors and omissions (E&O) insurance, can help pay for legal defense and any settlement or judgment costs arising from a negligence claim.

Breach of contract: If an electrical engineer fails to fulfill their contractual obligations, they may be sued for breach of contract.
Insurance protection: Professional liability insurance can help cover legal expenses and damages incurred from a breach of contract lawsuit.

Defective product or design: If an electrical engineer designs a product or system that is found to be faulty, they can be held responsible for any harm or damages caused by the defective product or design.
Insurance protection: Product liability insurance can help protect electrical engineers from the financial consequences of a defective product or design lawsuit by covering legal defense costs, settlements, and judgments.

Intellectual property infringement: An electrical engineer may face a lawsuit if they are accused of infringing on someone else's intellectual property, such as patents, copyrights, or trademarks.
Insurance protection: Intellectual property insurance can help cover the costs of defending against infringement claims, as well as pay for damages awarded to the plaintiff if the engineer is found to be at fault.

Personal injury or property damage: If an electrical engineer's work causes injury to a person or damage to property, they may be held liable for the damages.
Insurance protection: General liability insurance can help protect electrical engineers by covering legal defense costs, medical expenses, and property damage claims that arise from personal injury or property damage lawsuits.

Workplace accidents: If an electrical engineer is responsible for managing a worksite and an accident occurs, they may be held liable for any injuries or damages that result.
Insurance protection: Workers' compensation insurance can help cover medical expenses, lost wages, and other costs associated with workplace accidents. General liability insurance can also provide coverage for third-party injury or property damage claims.

For each of these scenarios, the appropriate insurance policy can help protect electrical engineers from financial losses and legal repercussions. It's crucial for engineers to have the right insurance coverage in place to protect themselves and their businesses.