Why Architects and Engineers Need More Than General Liability Insurance

If you are an architect, engineer, land surveyor, or design professional of any kind, you almost certainly carry general liability insurance. It is one of the first policies most businesses purchase, and for good reason. But if general liability is the only policy protecting your firm, there is a significant gap in your coverage that you may not discover until it is too late.

What General Liability Insurance Covers

General liability insurance protects your business from third-party claims involving bodily injury, property damage, and personal injury. If a client trips and falls in your office, or your business operations accidentally damage someone’s property, general liability is the policy that responds.

What General Liability Insurance Does Not Cover

The work architects, engineers, land surveyors, and other design professionals do is fundamentally intellectual. You are hired for your expertise, your judgment, and your professional recommendations. When something goes wrong, such as a design error, a miscalculation, or an oversight in a set of drawings, the resulting claim is rooted in your professional advice, even when it involves physical damage. General liability does not cover that.

Most general liability policies contain what is known as a professional services exclusion, which specifically carves out claims arising from professional services rendered. That means the policy you have been paying for year after year may offer no protection at all for the type of claim most likely to affect your firm.

What Professional Liability Insurance Covers

Professional liability insurance, also called errors and omissions (E&O) insurance, is specifically designed to cover claims that arise from your professional services. If a client alleges that your design contained an error, that your specifications were incomplete, or that your professional judgment caused them financial harm, professional liability is the policy that responds. Simply put, it covers claims alleging a breach of the professional standard of care.

It covers the cost of your legal defense, settlements, and judgments up to your policy limits. Design and construction disputes can easily run into six or seven figures, so the value of having this coverage in place cannot be overstated. If you are an engineer, we cover the details in What Engineers Need to Know About Professional Liability Insurance.

What Professional Liability Insurance Does Not Cover

Professional liability insurance does not cover:

• Slip-and-fall accidents that occur on your property
• Liability you assume under a contract that goes beyond the tort liability you would have without that contract
• Guarantees or warranties you make
• Intentional acts

There are other exclusions, but these are some of the big ones.

Why You Need Both

General liability and professional liability are not interchangeable. They cover fundamentally different types of risk, and design professionals face both.

You need general liability for the slip-and-fall, the damaged property, and the bodily injury claim. You need professional liability for the design error, the missed deadline with financial consequences, and the allegation that your professional services fell below the standard of care.

Carrying one without the other leaves your firm exposed. The goal is to have both policies working together, with no gaps between them. These two policies don’t cover every risk your business faces, but they do cover two of the largest.

The Risk of Going Without Either Policy

Some design professionals assume that because they have never had a claim, they don’t need professional liability or general liability insurance. That logic has a flaw. The absence of a past claim doesn’t mean the risk doesn’t exist. It means you have been fortunate so far.

Construction and design disputes are among the most expensive types of professional litigation. Defense costs alone can reach tens or hundreds of thousands of dollars before a case ever goes to trial. Without professional liability coverage, your firm pays for all of that out of pocket.

Beyond the financial exposure, many project owners, municipalities, and general contractors now require design professionals to carry professional liability as a condition of the contract. If you don’t have it, you may not be able to win the work in the first place.

Working With DKB Group LLC

DKB Group LLC works with architects, engineers, environmental consultants, construction managers, healthcare professionals, land surveyors, and other design and technical professionals across 44 states. Our owners have decades of experience insuring design professionals. We help design professionals build a complete insurance program, one where general liability and professional liability work together to protect what you have built.

We also handle personal insurance, so you have the convenience of one point of contact for both your commercial and personal policies.

If you’re not sure whether your current insurance program has gaps, reach out to our team and we’ll review what you have. Get a quote today.

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