A client or principal may require an engineer to hold a higher Professional Indemnity limit than the business currently carries.
For example, an engineering firm with $2 million PI cover may be presented with a contract requiring $5 million.
Before agreeing to the requirement, consider:
- whether the existing insurer can provide the higher limit
- the additional premium and excess
- whether the higher limit is required for one project or the whole business
- how long the contract requires the limit to be maintained
- whether run-off cover is required
- whether the limit is available in the insurance market
Engineers should avoid simply agreeing to an insurance requirement on the assumption that additional cover can always be purchased later.
It is generally easier to check availability and cost before the contract is signed.
