Consulting and Chartered Engineer Insurance
Engineering is the profession where a mistake is least likely to be noticed at the time and most likely to be expensive when it is.
The Mistake Surfaces Years Later
A structural calculation, a drainage design, a temporary works scheme or a foundation specification gets handed to a contractor who builds exactly what it says. If it was wrong, the first sign is often cracking, settlement, flooding or deflection months or years later, by which time the building is occupied and putting it right means taking apart work that other people did correctly.
That shape has three consequences for the insurance. The cover is professional indemnity rather than public liability, because the loss is financial and your drawings damaged nothing. It is written on a claims made basis, so the policy in force when the claim arrives is the one that answers. And the exposure outlives the appointment, which is why run-off is not optional at the end of a career.
What Consulting Engineer Insurance Covers
Professional indemnity
The core cover and usually the only one that matters. Answers a claim that your design, calculation, specification or report was negligent and caused a financial loss. It pays the defence as well as any settlement, and on a technical dispute the defence is frequently the larger figure because expert evidence is expensive.
Run-off cover
Keeps the policy answering for designs already built after you retire, sell or close the practice. Because claims arrive years later, cancelling on your last working day leaves every project you ever signed unprotected.
Collateral warranty and third party exposure
Funders, purchasers and tenants commonly require warranties giving them a direct route to you. The policy has to contemplate those obligations rather than treating your client as the only person who can claim.
Public and employers' liability
Site visits and an office. Small beside the indemnity exposure and still necessary: employers' liability is compulsory from the first employee at a £5 million statutory minimum, and site visits need public liability at whatever the principal contractor requires.
Cyber and data
Practices hold drawings, models and client data, and a design office that cannot open its files has stopped working. Business email compromise rather than anything dramatic is the realistic incident.
Legal expenses
Recovering unpaid fees, employment disputes, and representation at a professional body or regulatory hearing, which professional indemnity does not cover.
Where The Cover Stops
Wordings differ between insurers, so treat these as the usual position rather than as universal fact. Where one of them matters to you, it is worth checking on your own schedule before you need to.
Claims made, not when you designed it
The policy that responds is the one in force when the claim is made, not when the work was done. A gap of a month can leave a claim about a ten year old design with nothing behind it, which makes continuity worth more than price on this cover.
The retroactive date
A new policy often covers only work carried out after the date you first took cover. Moving insurer without carrying the retroactive date across can quietly remove a career of past designs, and it is the detail most often missed when a practice shops around.
Fitness for purpose and guaranteed performance
Professional indemnity covers negligence, meaning a failure to exercise reasonable skill and care. An appointment or warranty promising a result, warranting fitness for purpose or guaranteeing a performance figure imposes a stricter standard that most policies exclude. These clauses appear quietly in appointments and collateral warranties.
Defence costs inside or outside the limit
If costs erode the limit, the limit is smaller than it looks. On engineering disputes, where both sides instruct experts, that difference is substantial.
Aggregate against any one claim
A systematic error in how you apply an assumption repeats across every project you did the same way. That makes an aggregate limit far more significant here than in professions where each job is unique.
Cladding, fire safety and specified exclusions
Many engineering policies now carry exclusions around cladding and external wall systems, and sometimes around specific materials. Read them: an exclusion can apply to a project type you are actively bidding for.
Read The Appointment Before You Sign It
More engineering claims are made worse by the appointment than by the engineering, and almost all of it is avoidable at the point of signature.
Four things do the damage. A fitness for purpose or warranty obligation, which promises a result rather than reasonable skill and care and sits outside most cover. A net contribution clause absent, meaning you can be pursued for the whole of a loss other parties contributed to rather than for your share. Novation on design and build, where your appointment transfers to a contractor whose interests are no longer aligned with yours. And an uncapped liability, where nothing limits your exposure to the fee you earned or to any figure at all.
All four are routinely amended before signature and essentially never afterwards. Having somebody read the document is the single highest value thing you can do, and it costs a fraction of one hour of a dispute.
Anchor The Limit To The Loss, Not Your Fee
The common error is setting the limit against fee income, which has no relationship at all to what an engineering mistake costs.
A foundation design worth a few thousand pounds in fees can cost the value of underpinning a building. A drainage scheme on a modest fee can cost the remediation of flood damage across a site. A temporary works design error can cost a collapse. The question is not what you charged; it is the size of the loss your mistake could cause the people relying on it.
That makes the project value and the consequence of failure the right reference points, with the contractual requirement as a floor rather than a target. And where a practice has one client far larger than the rest, the exposure is set by that client rather than by the average.
Temporary Works Is Its Own Risk
Engineers designing or checking temporary works carry an exposure with a much shorter fuse than permanent design, and it deserves separate thought.
Falsework, propping, excavation support, facade retention and lifting schemes fail during construction, with people working next to them. So unlike a permanent design error, the consequence can be injury rather than cost, and the investigation afterwards will involve the HSE rather than only a loss adjuster. The claim may be brought against both your professional indemnity and, where you were present, your public liability.
Two practical points. Make sure the appointment is clear about whether you designed, checked or merely reviewed, because those are different duties and they get blurred on site. And keep the version history: temporary works designs get altered on site more than anything else, and being able to show what you issued is the whole defence.
Where Engineering Meets A Building Site
This is the part a general professional policy handles least well, and it is the ground we spend most of our time on because we insure the contractors as well.
An engineer on a construction project picks up obligations that have nothing to do with office work: collateral warranties to funders and tenants, step-in rights, novation, obligations to the principal designer under CDM, and sometimes a requirement to maintain cover for twelve years after practical completion. That last one is a real commitment, because it means continuing to pay for a policy long after the fee has gone.
Where you are asked to maintain cover for a stated period, price that into the fee rather than discovering it later. And where a project requires a limit above what you hold, raising it for a single job is usually possible and is a far better answer than signing an obligation you cannot meet.
How To Choose A Broker As A Consulting Engineer
Engineering professional indemnity is written by a defined set of insurers and the policies differ more in wording than in price. We are an FCA regulated broker and will not tell you we are the best choice. These are the questions that decide it, and they work on any broker including us.
Did they explain claims made and the retroactive date?
The single most important feature of this cover, and the one practices are least often told about. If nobody has explained that changing insurer can remove years of past designs from cover, keep asking until they do.
Will they read an appointment before you sign it?
Fitness for purpose, net contribution, novation and uncapped liability are where avoidable exposure enters an engineering practice. All four are amendable before signature and none afterwards.
Is the limit anchored to the loss or to your fee income?
A broker scaling the limit from turnover has not thought about it. The reference should be the size of loss your design could cause and the value of the projects you work on.
Do defence costs sit inside the limit?
On an engineering dispute both sides instruct experts, so costs are significant even when you are eventually found to have been right. A limit absorbing them is smaller than the figure suggests.
What exclusions apply to the work you actually bid for?
Cladding and external wall exclusions are now common, and some policies restrict specific materials or project types. An exclusion covering work you are actively tendering for is worth finding before the tender, not after.
Has temporary works been separated from permanent design?
They are different duties with different consequences, and whether you designed, checked or reviewed matters. A policy that does not distinguish them has described one risk and priced another.
Factually, here is what we do against those questions. We explain claims made and check the retroactive date carries across whenever cover moves, we will read an appointment or a collateral warranty before you sign it, we set the limit against project values and the consequence of failure rather than scaling it from fee income, we tell you whether defence costs erode the limit, and we flag the cladding and material exclusions against the work you actually tender for. We are a broker, so it goes to several insurers rather than one.
We also insure the contractors who build what you design, including the groundworkers, steel erectors and cladding contractors, so where a dispute moves from the drawing to the workmanship it is familiar ground rather than a different department.
What Moves The Price
Every policy is priced on the business behind it. These are the things that move the premium:
- The limit of indemnity, and whether it is any one claim or aggregate
- Annual fee income and the value of the projects you work on
- The disciplines you practise, with structural and temporary works rated higher
- Whether you design, check, or review only
- The retroactive date and how many past years are covered
- Whether defence costs sit inside or outside the limit
- Any cladding, fire safety or high rise work
- Claims, complaints and notified circumstances in six years
We are a broker, so we take it to several insurers rather than quoting one. Call 02382 000820 for a quote.
What We Need To Quote
- The disciplines you practise and any professional body membership
- Annual fee income and your largest project and client by fee
- The limit of indemnity required, and who requires it
- Whether you carry out temporary works design or checking
- Any cladding, external wall or high rise involvement
- The retroactive date on your current policy
- Any requirement to maintain cover after completion, and for how long
- Any claims, complaints or circumstances in the last six years
Cover that often goes with this
The gaps we most often find sitting next to this policy.
- Insurance for professionalsThe wider hub, including run-off and retroactive dates.
- Professional indemnityThe product page: how claims made works and where it stops.
- ArchitectsThe same appointments, warranties and novation questions.
- SurveyorsOften the same project and the same collateral warranty.
- Structural steel contractorsWho builds what you design, and where disputes cross over.
- Talk to a brokerSend us an appointment or a warranty before you sign it.
Common questions
What insurance do consulting engineers need?+
Professional indemnity above everything else, because the claim that happens is that a design, calculation or report was wrong and cost somebody money, with nothing physically damaged by you. The limit should be anchored to the size of loss your design could cause rather than to your fee income. Then public liability for site visits at whatever the principal contractor requires, employers' liability from the first employee at a £5 million statutory minimum, cyber for the drawings and models you hold, and legal expenses for unpaid fees and professional body matters. Run-off at the end is essential, not optional.
Why does engineers' professional indemnity work on a claims made basis?+
Because the policy that responds is the one in force when the claim is made, not the one in force when you did the design, and for engineers that gap can be a decade. Cracking, settlement or deflection surfaces long after practical completion. Two things follow. A lapse in cover, even briefly, can leave a claim about an old design with nothing to respond to. And switching insurer without carrying the retroactive date across can remove years of past projects from cover, because a new policy often only covers work carried out after you first took it. Continuity is worth more than price on this cover.
What limit of indemnity should a structural engineer carry?+
Start from the consequence of failure rather than from fee income, because the loss belongs to the people relying on the design and is not scaled to what you charged. A foundation design worth a few thousand in fees can cost the value of underpinning a building. Use the project values you work on as the reference and treat any contractual requirement as a floor. Then check two things on the schedule that matter as much as the headline number: whether defence costs sit inside the limit, and whether it is any one claim or in the aggregate, which matters a great deal if one assumption repeats across many projects.
Does professional indemnity cover a fitness for purpose obligation?+
Usually not, and it is the clause to look for in every appointment. Professional indemnity covers negligence, meaning a failure to exercise reasonable skill and care, which is the standard the law ordinarily holds a professional to. An appointment or collateral warranty that promises a result, warrants fitness for purpose or guarantees a performance figure imposes a stricter obligation that most policies exclude. The clauses appear quietly in appointments and warranties and they are routinely amended before signature, which is why having the document read first is worth more than almost anything else.
Who insures consulting and structural engineers in the UK?+
Professional indemnity for engineers is written by a defined set of specialist insurers, several reached through brokers rather than direct, and availability has tightened on anything involving cladding, external wall systems or high rise. Because the market is reasonably well defined, what separates placements is wording rather than price: the retroactive date, whether defence costs erode the limit, whether the limit is any one claim or aggregate, how contractual liability and collateral warranties are treated, and which project exclusions apply.
Do I need run-off cover when I close my engineering practice?+
Yes. Claims keep arriving for years after you stop, so cancelling on your last working day leaves every design you ever signed unprotected. Run-off keeps the policy answering for completed work and is normally arranged at the point you close, with the premium stepping down each year. Note that some appointments require you to maintain cover for a stated period after practical completion, commonly six or twelve years, which is a real financial commitment continuing long after the fee has gone. Price that into the fee rather than discovering it afterwards.
I design temporary works. Is that treated differently?+
Yes, and it should be declared separately. Falsework, propping, excavation support and facade retention fail during construction with people working alongside them, so the consequence can be injury rather than cost, and an investigation will involve the HSE rather than only a loss adjuster. A claim may be brought against both your professional indemnity and your public liability if you were present. Make sure the appointment states whether you designed, checked or merely reviewed, because those are different duties, and keep the version history of what you issued, since temporary works get altered on site more than any other design.
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