The Best E&O insurance for Architects, Engineers, and Designers

5-Star Excellence Awards

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  Product
  Max Coverage
  Company
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  QBE Professional Liability
  $10M
  
• 
  Tokio Marine HCC E&O Design
  $5M
  

• Admiral Insurance Group
• Argo
• Beazley
• CFC Underwriting
• Chubb
• Dual Commercial North America
• Hiscox

What is designers’ errors & omissions (E&O) insurance?

Designer’s errors and omission (E&O) or professional liability insurance protects professionals involved in the design and construction of buildings, including architects, contractors, engineers, interior designers, and surveyors, by covering costs that may be incurred in lawsuits and settlements arising from perceived mistakes or cases of negligence.

Construction management companies and property developers typically purchase designers’ E&O insurance to cover for damages resulting from the construction of high-cost projects. Some policies also provide coverage for subcontracted professionals.

It must be noted that while E&O policies cover for legal expenses stemming from oversights, failure to deliver promised results, and accusations of negligence, it does not cover damages resulting from fires and other calamities, and work-related injuries or illnesses.

What is covered by E&O insurance?

Designing and constructing a building involves making intricate decisions that can often make or break a project. Even a small oversight or mistake in calculations could lead to long delays during construction or catastrophic property damage once the building is completed. For those working in the design and construction industries, E&O or professional liability insurance covers the cost that might be incurred due to lawsuits, settlements, or punitive damages resulting from these mistakes.

E&O coverage also sometimes include subcontracted professionals, but this depends on the construction management firm and the insurance providers.

While E&O policies typically cover legal fees stemming from mistakes or accusations of negligence, it does not provide coverage for damages resulting from natural and man-made calamities, and work-related injuries or illnesses.

Why do architects and engineers need E&O insurance?

Architects and engineers perform complex tasks and make sophisticated decisions to complete a project, which expose them to unique risks. A minor error in judgement or slight oversight could result in huge consequences. A small mistake in the design of a structure or the choice of material for a project, for instance, could lead to catastrophic outcomes, opening them to the threat of lawsuits.

E&O insurance protects architects, engineers, and other design professionals from financial losses in the event a client sues. In a way, having E&O coverage also give these professionals peace of mind to help them focus on making sound decisions for a project.

What is the difference between E&O for designers and contractors’ liability insurance?

Designers’ professional liability insurance is designed to protect professionals involved in the design and construction of a building, including architects, engineers, and construction managers. This type of policy mainly covers errors in designing and advising.

E&O insurance for contractors, on the other hand, covers expenses incurred to repair or redo a trade contractor’s faulty work, and any legal costs incurred from lawsuits, settlements, and damages resulting from these errors. These professionals include carpenters, electricians, painters, plumbers, and heating and air conditioning technicians.

What is the difference between E&O and D&O insurance?

Director’s and officers’ (D&O) insurance, also known as management liability insurance, protects members of the executive management team of a construction or design firm from monetary losses incurred from lawsuits as result of their management decisions. Errors and omissions insurance, also known as professional liability insurance, protects businesses from accusations of negligence or failing to deliver professional services. E&O policies provide cover for any representative or employee of a construction or design company, not just its upper management.

How can designers choose the right E&O insurance for them?

E&O liability insurance varies in coverage, key features, and premiums depending on the type of design work a company is involved in. To find the right errors and omission policies that suit your designing business, it is best to talk to an experienced broker from a reputable insurance provider.

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