This bars actions against architects, engineers, and design professionals after a specified period of time following discovery of a deficiency or injury.
Architect & Engineer Professional Liability Insurance and the Statute of Limitations
As an architect or engineer, one is subject to the Statute of Limitations which is basically a prescriptive period that bars any party from initiating legal actions against the architect or engineer. This Statute of Limitations starts running after the discovery of a structural deficiency or injury in a property for a specific number of years before it is caused to be in-actionable by courts. If claims are not made in a timely manner before the actionable period runs out, then the claim can never stand.
This is just one of the reasons why architects and engineers get professional liability insurance to protect themselves from claims that relate to errors or omissions, especially when having provided their skilled services. Such errors may possibly lead to a party filing a future lawsuit against that particular architect or engineer within the Statute of Limitations that the particular claim falls under.
There are two types of insurance that can be provided for the professional and these are Errors & Omission insurance, and General Liability insurance. The main difference between these two kinds of insurance is that General Liability insurance covers accidents that may happen on property where work is happening, while Errors and Omission insurance covers claims made by customers after the work is done.
General Liability insurance is insurance that is usually required and useful for all companies to have. Mainly covering injuries and accidents that may occur on a work site, this insurance covers the costs involved in legal proceeding posting of bonds, payments for judgments, investigations, defense attorneys, settlements, and medical expenses.
In Errors and Omission insurance, there is a specific focus on the liability of a person who designs, consults, recommends and advises on a product or service, which is what architects and engineers fall under. Coverage is highly recommended to professionals who do these services to cover costs in legal defense for claims that customers will make against them when they find errors in contractual work.
Basically, General Liability insurance covers liabilities arising from occurrences and accidents in the property within which a company works. In the meantime, Errors and Omission insurance covers errors made by the consultants, contractors, owners and employees who work for the company and provide specific services. Depending on state or national law, the statute of limitations on an action filed against an architect or engineer will differ and parties making the claim have to file within that specified period otherwise they become in-actionable by the court.