Professional Liability Insurance: How Does Innocent Principal Coverage Work?

Working with a firm is one goal that many engineers and architects strive for in their industry. They want to have their name on the door, a large corner office overlooking the city skyline, among other perks of working with a firm. However, there is a down side to this, but this is where innocent principal coverage insurance comes in.

When a professional begins to work with a firm there is some insurance that the employer pays for. This is in the form of medical, dental, and accidental injury or death. However, professional liability is generally not one of the included policies. The individual architect or engineer must then make sure that they have their errors & omissions policy to protect them when something goes wrong at a project that they worked on.

There are several different policies the individual can choose from, as well as extras that are added on to the basic policy for different protections. The innocent principal coverage option is one of these. This basically states that the person with this coverage is excluded from any malpractice, or fraudulent, claims incurred by the firm as a whole.

For example, a firm that has just been served with a $500,000 wrongful death suit because of a project that went wrong that the firm working on. An engineer that has the innocent principal protection coverage in their own insurance policy is excluded from any liability that may incur. This person does not have to pay personally for any damages.

The innocent principal coverage option in a private professional liability insurance plan is an added expense that is paid in the premium, but worth the cost in the event a law suit does happen. Any engineer, or architect, that is working with a firm really ought to look into this type of coverage.