Increased project size can materially change an engineering firm’s Professional Indemnity exposure even where its engineering discipline stays the same.
Insurers commonly consider both:
- the engineer’s own professional fees, and
- the overall value of the projects on which the engineer works.
A firm that historically worked on $2 million projects but begins accepting $50 million or $100 million projects may present a materially different exposure even if its engineering discipline has not changed.
Larger projects can mean:
- greater potential rectification costs
- more consultants and contractors
- more complex contractual requirements
- higher required PI limits
- greater delay exposure
- larger potential claims
An occasional larger project may be acceptable under the existing insurance arrangement, but substantial changes should be disclosed.
The insurer may request project details or contracts before confirming its position.
