Common Mistakes That Increase the Insurance Cost for an Engineering Firm
- Nate Jones, CPCU, ARM, CLCS, AU
- 3 hours ago
- 2 min read
Engineering firms, civil, mechanical, electrical, structural, industrial, and design‑build, carry complex exposures. Because professional liability (E&O), contract requirements, cyber risks, and site‑visit hazards all factor into underwriting, the cost for engineering business insurance can climb quickly if a few common mistakes go unaddressed. Below are the issues that most often drive premiums up, and how to fix them before you request an engineer business insurance quote.
1) Weak QA/QC and Documentation
Underwriters look for well‑documented quality controls. Gaps such as missing peer review, informal checklist use, unclear version control for CAD/BIM, and ad‑hoc sign-offs increase perceived claim frequency. Formalise your QA/QC: adopt standardised checklists, require peer review on critical calculations, enforce version control, and maintain signed approvals for every deliverable.
2) Accepting Risky Contract Language
E&O costs rise when firms agree to unfavourable terms, broad indemnification, duty‑to‑defend provisions, or responsibilities for other parties’ work. Establish a contract‑review protocol: redline risk‑shifting clauses, align scope precisely with services, and require Certificates of Insurance (COIs) from any sub‑consultants with additional insured and waiver of subrogation where appropriate.
3) Undersized (or Oversized) Limits and Poor Deductible Strategy
Limits that are too low create catastrophic exposure; limits that are unnecessarily high inflate premium. Likewise, very low deductibles can cost more than they save. Right‑size your engineer business insurance by tying E&O limits to project sizes and client mandates, keeping GL/Cyber aligned with real exposure, and using moderately higher deductibles your firm can comfortably absorb.
4) Incomplete Cyber Controls
Firms holding models, plans, and client data face heightened cyber risk. Missing MFA, weak backups, no endpoint protection, or untrained staff can increase cyber liability pricing and claim likelihood. Implement MFA, encrypted and offsite backups, email security, endpoint detection, and phishing training; document these controls for underwriters.
5) Poor Claims Hygiene
Even small E&O or slip‑and‑fall claims can raise premiums for years if they recur or lack remediation. Maintain a claims playbook: report quickly, document facts, conduct root‑cause reviews, implement corrective actions (e.g., update checklists, revise details/specs), and keep a lessons‑learned log tied to QA/QC.
6) Misclassified Services and Staff
If you present as “office‑only design” while routinely performing site observation, construction administration, or design‑build activities, underwriters will price defensively. Accurately list disciplines, services (civil, structural, MEP, industrial), and staff credentials (PEs/EITs), and separate higher‑risk activities with proper endorsements.
7) Using a Generalist Broker
General brokers may miss engineering‑specific endorsements, project requirements, or E&O nuances, leading to gaps and higher premiums. A specialist can align coverage with contracts, secure better markets, and advise on QA/QC, cyber hygiene, and deductible strategy.
Get Lower Costs, Without Cutting Coverage
Not every insurer understands discipline‑specific engineering risks, contract language, or E&O complexity. Wexford Insurance partners with top‑rated carriers that specialise in engineer business insurance, helping firms select the right limits, deductibles, and endorsements, and avoid the mistakes that drive premiums up.
👉 Request your engineer business insurance quote from Wexford Insurance today and protect your projects, contracts, and reputation.
