Finding the right insurance for your environmental engineering business is important in protecting your business and achieving long-term success.
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Environmental engineers, along with other professionals who contribute their expertise and services to large-scale projects, are susceptible to client lawsuits and claims in the event that something goes wrong. Even if everything goes right, you can still be sued. An important way to safeguard your business from such lawsuits, along with the everyday risks of running a business, is to ensure that you have the proper insurance coverages in place. For the financial safety of your business and the people that you employ, it’s important to take time to research and consider investing in the right business insurance policies.
Business insurance is a good option for your firm if:
- You would like to insure your services and practice against claims of poor performance or errors in your work
- You employ others
- You provide benefits to your employees like health insurance or a 401(k)
- You work in an office that you lease or own and store valuable equipment or property in that office
- Clients or vendors visit your office
What insurance coverage do I need as an environmental engineer?
For environmental engineers, professional liability insurance is one of the most important coverages to obtain. Other insurance types, including general liability and workers’ compensation, are also critical to running your business. Below we explain some of the more common business insurance coverages that environmental engineers should consider.
Professional Liability Insurance
As an environmental engineer, your work can have important consequences on the viability of a building structure, as well as the safety of the structure and the surrounding environment. Many of the projects you work on could provide critical infrastructure for your town or municipality, and as such, may impact a large number of people. Any error or omission in your work can end up causing significant financial damage and lead to lawsuits and claims against your firm. Professional liability insurance, also known as errors & omissions insurance, can protect you from potential client lawsuits stemming from the performance of your professional duties. Professional liability insurance is one of the most important coverages an environmental engineer can obtain, as engineers are highly susceptible to these claims. Covered areas for professional liability insurance include negligence, misleading statements, performance, and breach of duty.
Examples:
- Errors/Negligence: Your company is responsible for monitoring the environmental impact of a large factory in northwestern Chicago. The team of employees assigned to the project fails to inspect the operation and maintenance of the factory’s electrostatic precipitators. As a result, 30 people who work in and around the building develop lung problems. They file a class action lawsuit against your firm for negligence.
- Performance: Your firm is hired to conduct an environmental impact assessment of a highway expansion project. Because of an internal filing error, your team misses an important deadline with the city, delaying the highway project by three weeks and costing the city an additional $300,000.
- Lawsuit without merit: Your company completes an environmental impact report for a nuclear power plant. You inform them that their waste disposal methods are harming fish in a nearby river, but the energy company fails to take action. They are later sued by the city for harming the river. The energy company decides to sue your firm.
General Liability Insurance
General liability insurance is one of the most commonly purchased types of business insurance and protects your business from lawsuits claiming property damage or bodily injury caused by your business or your employees. If your firm or one of your employees injures a third-party in the course of business, liability insurance can help protect your business against the financial consequences of lawsuits. Third-parties include anyone who is not an employee of your business, such as a vendor, customer, or landlord. General liability insurance covers claims from physical injuries or property damage caused by your business. It also covers non-physical injuries such as libel, slander, copyright infringement, or false advertising.
Examples:
- Property damage: You send one of your employees to a recycling plant to oversee the maintenance of their waste disposal system. He observes a problem with one of the machines and tries to fix it manually, accidentally starting an electrical fire in the process. The fire damages the machine as well as other nearby equipment. General liability would cover the damages.
- Bodily injury: Because you like to keep up on architectural trends, you decide to install new glass paneling in the cubicles in your office. A client visits your office and stops by a cubicle to chat with a manager. He trips on an electrical cord and falls into a glass panel, shattering it in the process. The client suffers severe cuts and must go to the emergency room. General liability would cover his medical fees.
Workers’ Compensation Insurance
Workers’ compensation insurance is a form of liability insurance that pays out benefits to an employee if he or she suffers a work-related injury or illness. If employees decide to accept these monetary benefits, they agree not to sue your business.. In most states, businesses that have employees who are not founders or partners are required to carry workers’ compensation insurance. 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:
- Funeral expenses
- Disability benefits
- Medical expenses
- Rehabilitation costs
- Death benefits
- A portion of lost wages
Example:
- Your firm works with a coal mining company in Pennsylvania to measure and reduce any negative impact they have on the environment. One of your employees develops a lung infection from inhaling debris on the jobsite. She must take a month off of work in order to recover. Workers’ compensation pays for her hospital bills and a portion of the income she loses out on by not working.
Commercial Property Insurance
Commercial property insurance helps protect the value of the physical assets your firm owns or leases if that property is damaged or lost due to accidents or disasters. Commercial property insurance covers property such as buildings, equipment, inventory, furniture, artwork, and computers. Commonly covered causes of loss include fire, lightening, wind, hail, explosion, and vandalism. Note that commercial property insurance does not cover any vehicles your company owns. For that coverage, you’ll need commercial auto insurance.
Examples:
- Buildings: A severe windstorm tears the roof off of the office building that you work out of, leaving your office partially exposed. You must pay to repair the damaged roof.
- Contents: You operate from a one-story office building in an urban area, and one of your employees leaves the office windows open overnight. Local thieves manage to sneak in through an open window and take all of your computer equipment.
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.
Example:
- You must travel to a local beach to monitor the impact that a major hotel’s construction is having on wildlife. Because the beach is crowded, you have trouble finding a spot to park your company car. The lot is so jammed that you wind up accidentally backing into another car, damaging its headlights as well as your own bumper. Commercial auto insurance would cover the damages.
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 environmental engineer, you work to reduce negative environmental impacts and develop solutions for environmental problems. Your work can have far-reaching effects, benefiting local wildlife and ecosystems, but mistakes can happen and the consequences can be grave. To protect you and your firm against lawsuits related to your professional work, consider purchasing professional liability insurance. For the many other risks that come with running a business, your best bet is to find the right combination of business insurance policies. From general liability to commercial property insurance, there are a number of coverages that will help to protect you and your employees in the face of any unfortunate events.