If you are a professional engineer, you cannot afford to be without an engineers professional liability insurance policy. If you are not covered, then one lawsuit, even if you are eventually exonerated, could result in financial ruin due to costly legal bills. Of course, professional liability policies can be expensive; however, if you understand how the monthly premiums are computed, you have some power to influence them and get yourself a cheaper quote. The basic consideration in determining the size of the quote is whether or not a firm or professional engineer is seen as a good risk or a bad risk. This is determined by assessing their potential loss exposure, or areas where there is the risk of loss. These areas are frequency and severity, or how frequently your firm has made claims against its policies in the past and how severe those claims have been. Underwriters review these factors thoroughly and use them to create a specific rate for your company, which they will apply against your professional fees or the cost of a specific project and use that to compute the dollar value of the premiums. Hence, in order to get a good price on your engineers professional liability insurance, you need to present your firm in the best light possible.

One way to do this is to implement a prudent risk management strategy to manage the various risks you may encounter on your projects. This is particularly important if your firm is involved with many projects which are considered high risk because of the greater possibility of bodily injury, as well as generally being bigger in scale than regular commercial buildings. These projects include schools, prisons, stadiums, industrial plants and parking structures. Among the risk management strategies which may be recognized by underwriters as making companies deserving of better rates include in-house safety education programs, insured sub-contractors, limiting liability provisions as well as membership in professional organizations.

Your firm should also work with a licensed professional liability insurance broker to prepare the insurance application and help gather mitigating information in order to encourage the underwriters to give you a competitive quote. For example, if you have made a claim against your policy in the past five years, they can help you present it in the best possible light as well articulating the lessons you have learned that would ensure you avoid future claims.