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Business Insurance for Electrical Engineers and Engineering Firms

Insurance for Electrical Engineers

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As an electrical engineer, you are responsible for creating and maintaining equipment, devices, and systems that are powered by electricity. Whether you work in construction, power engineering, or another electronics-related field, your work is highly complex in nature and requires strict attention to detail. In your line of work, even small mistakes can lead to big problems, with potentially large financial consequences for you and your clients. If a system you designed or a piece of equipment you worked on ends up failing or malfunctioning, your firm may be held financially liable.

Few businesses relish the possibility of a lawsuit. They can drag on for months or years, costing you thousands in legal fees even if you are found innocent. In order to better protect your firm from lawsuits relating to your professional work, consider purchasing a comprehensive business insurance plan. Even without a lawsuit, your business could still face financial danger. In the event of a natural disaster or employee accident, you’ll want to be appropriately covered. Business insurance could be a good fit for your engineering firm if:

What insurance coverage do I need as an electrical engineer?

While many businesses will need basic coverage like general liability insurance, companies that offer services or advice will generally need to obtain professional liability insurance. For engineering firms, this coverage is particularly important as lawsuits are quite common when it comes to design work. Below we explain some of the more common business insurance coverages that electrical engineers should consider.

Professional Liability Insurance

As an electrical engineer, your work impacts the viability of the products and safety of buildings you are responsible for. Professional failure on your part can create serious hazards or project setbacks and result in financial liability. Moreover, even if you perform your job correctly, you can still be sued.

Professional liability insurance, also known as errors & omissions insurance, can protect you from potential client lawsuits stemming from the performance of your professional work. Additionally, professional liability insurance for engineers can protect against third-party bodily injury and property damage, unlike most other professional liability policies. Professional liability insurance is one of the most important coverages an electrical engineer can obtain, as they are highly susceptible to these claims.


General Liability Insurance

General liability insurance, or commercial general liability, can protect your business from lawsuits claiming property damage or bodily injury caused by your business or your employees. This is an important coverage for any business, as no matter how careful we are, accidents can happen and cause damage to others. The four types of coverage included in general liability insurance are: products & completed operations, property damage, bodily injury, and personal & advertising injury.


Workers’ Compensation Insurance

If an employee at your company suffers a work-related injury or illness, workers’ compensation insurance, commonly known as workers’ comp, would be able to provide financial benefits to help cover medical expenses, lost wages, and more. Workers’ comp is a critical coverage that is almost always required if your company has employees that are not owners or partners in the business. In exchange for accepting workers’ comp benefits, an injured employee agrees to not sue your business over the injury. Workers’ compensation insurance is no-fault, which means that it pays benefits regardless of whether the employer or employee is at fault for the injury.

Workers’ compensation can cover the costs of:


Commercial Property Insurance

Commercial property insurance aims to protect the investment you’ve made in your business property, including the buildings that your business operates out of, as well as any tools, equipment, furniture, or other property relevant to your business. Coverage includes the buildings themselves, the contents of those buildings, and the property of others in your care. Commonly covered perils include fire, lightning, explosion, windstorm, hail, theft, and vandalism.


Commercial Auto Insurance

Your company likely owns or leases one or more vehicles to visit worksites or client offices. In the event of an accident involving your vehicles, commercial auto insurance can provide financial protection. This type of insurance has both liability and property components. The liability component protects your business if one of your workers is at fault for causing a crash and causes bodily injury or damages someone else’s vehicle or property. The property component of commercial auto insurance protects the value of your vehicle against crashes, theft, and other perils. Importantly, commercial auto insurance also provides protection for vehicles owned personally but used for certain business purposes.


Business Owner’s Policy

A business owner’s policy, also known as a “BOP,” is a special bundling of policies that can provide coverage for risks that are common to small business owners. BOPs combine property, general liability, and business income and extra expense insurance coverages for qualified small businesses. Importantly, a business owner’s policy can help you save money, with lower premiums than buying the individual coverages separately.

Final Word

As an electrical engineer, you may be more exposed to certain risks than other businesses. Because of the intricate and complex nature of your work, just one small mistake could have a serious impact on a client’s business and ultimately lead to a crippling lawsuit. Furthermore, simply running a business can expose you to a variety of liabilities. Whether it is a natural disaster or an employee accident, unfortunate events can and do happen. . One of the best ways to ensure the financial security of your business is to invest in business insurance. While policies like commercial property and general liability insurance can protect you from the unexpected dangers that all businesses face, policies like professional liability insurance can protect you financially in the face of lawsuits alleging errors or mistakes in your professional work.

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