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Why Architects and Engineers Need Errors and Omissions Insurance


Why Architects and Engineers Need Errors and Omissions Insurance E&O Insurance Responds to Claims of Negligence, Mistakes

Architects and engineers, as with any other type of professional, are relied upon for their expertise, years of experience and ability to get a project done. A homeowner looking to undergo major renovation, including moving walls to accommodate a bigger kitchen or dining area, requires the expertise of an engineer to determine if this is feasible and will not damage the structure of the home. A new commercial building project requires a team of professionals to make sure that the architect’s design vision is realized. Should something go awry down the road causing delays and financial damages, these professionals would be liable in the event of a claim.

An Architects and Engineers Errors and Omissions (A&E E&O) policy is designed to respond to claims arising from negligence or an error during the course of providing one’s professional service. Also known as Professional Liability insurance, the policy provides coverage for defense costs (regardless of the outcome) and indemnification if you’re found liable for damages. Generally, errors and omissions claims are filed against architects and engineers for various reasons such as missed deadlines, poor execution or omitting something.

For example, let’s say, you have a projected move-in date of April for a new home but because of miscalculations on construction time-frames, the homeowner is not able to get into the house until September. He sues for the extra expenses this delay is costing him. Or, construction delays due to design flaws in a commercial building cause the owner or developer to pay interest on the project’s financing as well as the expenses involved for redesign. The project owner/developer sues for these expenses as well as for the loss income in getting tenants into the building because of the delay.

Inside an A&E Errors & Omissions Policy

E&O policies for architects, engineers and design professionals are custom built to suit the individual firm’s needs. Policies are on a claims-made basis, which means your policy must be in place both when an incident occurs and when you file your claim. Also, typically policies are available in increments of $1 million, with a deductible that represents your out-of-pocket expenses before the policy responds. Deductibles vary depending on the needs of your business and the specifications of the policy.

At Axis Insurance Services, we specialize in Errors and Omissions insurance, including providing customized policies for architects, engineers, structural design consultants, safety engineers, design build engineers, drafting professionals, and industry-related consultants. Moreover, we can tailor a policy to include:

  • Structural defects
  • Pollution and Contaminates related coverage
  • Contingent Bodily Injury/Property Damage
  • Innocent insured coverage for dishonest acts
  • Coverage for Independent Contractors
  • Design Build Services
  • Joint Venture Coverage

It’s important to note that all architect and engineering firms should carry this coverage – whether you’re a start-up, a sole practitioner or a large company. With construction spending up and various facets of the real estate industry (apartments, multifamily units, commercial office buildings) experiencing a turnaround from years prior, so much is at stake when working on these projects where things can go wrong – even for firms with robust Best Practices in place. The right custom professional liability policy will serve to protect your assets and reputation in the event of loss. Give the professionals at Axis Insurance Services a call to find out more about our E&O policies: (877) 787-5258.

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Blogged on: July 22, 2014 by Mike Smith
Error Omissions
Error Omissions
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Error Omissions