How to Protect Engineers with Public Liability Insurance
Public liability insurance forms an important part of every business’ cover. Most businesses can benefit from public liability insurance, including engineers in South Africa. Here’s how you can use this vital form of insurance to protect engineers from public liability claims.
Do Professional Engineers Need Insurance?
Yes, engineers in South Africa can benefit from insurance. Every engineering project has risks associated with it. Mitigating these risks by getting various forms of insurance can protect the engineer and the business. The first type of insurance that is important for engineers is professional indemnity insurance.
This type of insurance covers the engineer for errors and omissions and charges of negligence. We all know that the smallest error in design or execution can result in major disasters for engineers. For this reason, engineers need professional indemnity insurance.
Can Engineers be Held Personally Liable or Sued?
In South Africa, engineers can be held personally liable for public liability charges related to their design, construction, or engineering project. This means that if a member of the public sustains injury or loss due to your design, construction, or any error in your engineering project, you could be held personally responsible. You may need to pay for the damages. These amounts can skyrocket quickly.
That’s where public liability insurance for engineers comes into play. This is the second type of insurance that engineers can get. According to the Engineering Council of South Africa, engineers are responsible for the design and inspection of any engineering aspect of a project.
What Can an Engineer be Held Responsible for?
Engineers can be held liable for damages and injuries that occur due to any work they design, inspect, and engineer. They can be responsible for the design of structural elements, the careful selection of and specifications for materials, investigating site conditions, and services such as water, electrical, fire, mechanical, and other installations.
Engineers typically certify that their design has been implemented properly after inspecting any work they are hired for. This excludes the workmanship of contractors. If any damage or loss then occurs, they are held responsible because they certified that it was implemented effectively. If an engineer has public liability insurance, it usually covers this eventuality.
The rules of conduct of the ECSA state that engineers should apply their expertise to benefit humanity and the environment. They should execute their work in accordance with the accepted professional norms and with integrity and sincerity. They should respect their fellow human beings and their interest, giving honour to their standing profession. They’re expected to continue to improve their skills and the skills of their subordinates. Finally, they should encourage excellence in their profession.
Which Laws Apply to Engineers in South Africa?
Engineers in South Africa can expect to be held accountable based on three main South African laws. Sometimes more apply, depending on the project. These are the Consumer Protection Measures Act, Act 95 of 1998, the Occupational Health and Safety Act, Act 46 of 2000, and the National Building Regulations and Building Standards Act, Act 103 of 1977. Sometimes a fourth Act also applies, namely the Engineering Profession Act, Act 46 of 2000. You can find copies of all these acts on the internet.
What Types of Insurance Do Engineers Need?
Engineers need professional indemnity insurance, public liability insurance, and sometimes specialised insurance for engineers or other forms of specialised engineering where applicable. Engineers insurance can sometimes include professional indemnity, public liability, and other forms of insurance such as vehicle insurance.
In South Africa, engineers are not legally obliged to have this type of cover. They may, however, need to get this insurance as part of the terms and conditions in a contract. Many of those who hire engineers expect them to have public liability cover and professional indemnity cover. Even though it isn’t expected by law, getting insurance is a great idea. It could save your engineering business from disaster.
How Much Cover is Enough Cover?
Unlike claims for the replacement of stolen or damaged items on a personal asset insurance plan, public liability claims can reach exorbitant amounts. The amounts are also hard to predict because they depend on hypothetical situations that have not yet occurred when you purchase the cover.
It’s important to assess your business to discover all the possible eventualities. You, as the business owner, will best know how things can go wrong in your business. Instead of hiring someone to tell you what your risks are, you as the business owner can best assess it and calculate how much you could hypothetically need to pay. Aim to get cover that is above the amount you calculate.
How Much Does Public Liability Insurance for Engineers Cost?
The cost depends on your work, your demographics, and your risk profile. Then, of course, the amount of cover you want influences your premium amounts. If you get a lower amount of cover, your premiums will be lower. You may then have to pay the balance of any claim if the claim amounts to more than you are covered for.
Do you Have to Display Your Public Liability Insurance?
In South Africa, engineers are not obliged to display their public liability insurance in a visible place. Companies or individuals hiring an engineer may ask to see proof that the engineer is insured before signing them on for work. This is an acceptable part of the process in the South African industry.
DISCLAIMER: The information provided in this article is meant for informational purposes only and should not be construed as legal, medical, or financial advice. Facts stated in this article are correct at the time it was published.
References: Engineering Council of South Africa; Santam