Defence costs may sit inside or outside an engineer’s Professional Indemnity limit, depending on the policy wording.
Some Professional Indemnity policies provide defence costs in addition to the limit of indemnity, while others may include some or all defence costs within the policy limit.
This distinction can be important for engineers because professional claims can involve substantial legal and expert costs even before any settlement or judgment is reached.
For example, if defence costs are included within a $2 million limit, money spent defending the claim may reduce the amount remaining to meet any covered settlement.
Engineers should check:
- how defence costs are treated
- whether additional limits apply
- whether sub-limits operate differently
- whether the insurer’s consent is required before costs are incurred
The structure of the policy can be just as important as the headline limit shown on the schedule.
Engineers Australia provides broader guidance on Professional Indemnity Insurance and policy considerations for engineering practices. See its Professional Indemnity Insurance guidance.
Need help with checking how defence costs apply? #
See our Professional Indemnity Insurance for Engineers page, review the engineering insurance FAQs, or request a written quote.
