Do you own an engineering business? If so, then you understand the importance of protecting your company and staff from an unforeseen event or claim.
You need to carefully consider questions like:
We’re here to answer these questions and more. Let’s break it down and help you find a competitive policy that serves your business.
In Australia, both public liability insurance and professional indemnity insurance, as detailed further below, are very important for all types of engineers to consider, from mechanical engineers and electrical engineers to civil engineers.
These policies could potentially protect you in the event a claim if, for example, you’ve breached your professional duty, or you’re found negligent.
Even if these types of business insurance aren’t compulsory, such protection is worth considering. After all, you wouldn’t want to be out of pocket or out of work if something unfortunate happens.
In the event of some bad luck or a claim made against you, the benefits of business insurance may include the following:
Let’s go through some of the more common types of business insurance to help you determine which ones may apply to you:
Public liability insurance protects you and your business if a third party (a customer or member of the public) claims against you for injury, property damage or death. An appropriate level of cover protects you in the event you’re found negligent in your business activities.
Example: You repair a heavy-duty milling machine at a factory however, you forget to reattach the safety guard. Hours later, a bystander trips over the guard (you left on the floor) and injures themselves in the process. If found negligent, this type of insurance will cover the settlement payment (if required). Furthermore, the policy will pick up defence costs, even those incurred in responding to an allegation.
If you provide your clients with advice or information, then professional indemnity insurance protects you against claims of negligence, should you make a mistake or omission.
Example: You designed the plans for the new bridge being built in town. However, you made one error in your plans that caused a few headaches down the line, not to mention your budget blowing out and your company not meeting the agreed-upon schedule. With professional indemnity insurance, your legal costs and any payouts resulting from the claim will be covered.
This insurance protects you and your business against mismanagement, including allegations of discrimination, bullying and intellectual property breaches. There are typically five components to this type of insurance, and you can tailor a policy to suit your situation.
Example: Your company is undergoing significant budget cuts. As a result, you must make three employees redundant. One of the unlucky three is six-months pregnant and eventually makes a claim based on discrimination. An appropriate level of management liability insurance covers legal costs and potential damages (sum payout) awarded to the claimant.
If you host sensitive data and information in your computer systems, then you may want to consider cyber insurance.
Example: Malicious software is implanted in your company’s mainframe by cyber-criminals. As a result, highly sensitive customer data is stolen, leading to a host of compromised business-customer relationships and legal disputes. This type of insurance will protect you in the event of loss or damage to your systems and data, liability due to a virus or hack, legal costs, fines and penalties, plus much more.
Even if your books are up-to-date and perfect, a random audit by the Australian Taxation Office (ATO) could leave you with accountancy and other professional fees. This cover is designed to cover these costs.
Example: The ATO flags your business for an audit after you’ve shown operating losses consistently year on year. Throughout the long and arduous process, you’re required to pay various accounting and legal fees. Tax audit insurance helps cover accountant, tax agent fees other professional fees relating to the audit. Please note that tax audit insurance will not cover fines or taxes imposed.
If you’re a contractor or sole trader, you rely on your ability to work to generate income. As such, it’s a good idea to consider personal accident insurance.
Example: On the construction site, an errant beam swings into your body and breaks five ribs. During the recovery period, you’re unable to work and lose a large amount of income. This type of insurance includes loss of income due to injury or illness. It can even include payouts to the limit of your cover if you’re disabled or pass away.
In addition to the types of insurance listed above, you can also consider the following forms of cover:
N.B. All types of business insurance are subject to terms and conditions. Always read your policy’s PDS for a complete overview of what’s covered and excluded by your insurer.
There’s no ‘one size fits all’ policy that suits every type of engineer or engineering business. It depends on your specific needs and area of speciality. However, public liability and professional indemnity insurance are highly recommended for engineers due to typical engagement terms.
Conveniently, when you start the comparison process with us, we’ll show you the most popular types of insurance taken out by your peers.
The answer to this question will depend on a variety of factors, including:
If you have any questions about the type of cover and how much you need, please call one of our friendly team for support.
Additionally, when you use our free online comparison tool to get a quote, we’ll walk you through the step-by-step process to help you understand what an appropriate level of cover looks like.
When you take out a business insurance policy, it’s important to understand what’s covered and what’s not covered. Here are some common exclusions:
To avoid underinsurance, ensure you update your policy regularly, especially when details change. As you’re checking your cover, make sure your policy adequately protects you and your business for a range of scenarios.
If you fail to do either, you risk underinsurance.