What Is Architects and Engineers (A&E) Liability Coverage?
Architects and Engineers (A&E) liability coverage is professional liability insurance that provides coverage to architects and engineers from errors and omissions claims.
Understanding Architects and Engineers (A&E) Liability Coverage
Architects and engineers liability coverage, also called A&E liability coverage, can be purchased by a wide range of building professionals, including electrical or structural engineers, construction managers, surveyors, or design and build architects. The policy typically lasts for a single year and is purchased for the firm rather than for a specific architect.
Designing a building is a complex undertaking. Mistakes in calculations can result in construction delays or damage to the structure after it has been completed. Architects could make errors while designing the slope of a roof, and engineers may forget to mention the type of adhesive that has to be used in a pipe. The materials that the professionals select may ultimately be unsuitable for the environment.
Construction management firms and real estate developers often purchase liability insurance to protect against damages resulting from the construction of a building. In some cases, the policies will provide some coverage to professionals that are subcontracted, including architects and engineers. However, the limits on coverage may be insufficient to cover all claims resulting from errors and omissions. In these cases, an A&E liability policy would provide additional coverage.
The Scope of A&E Liability Coverage
The type and extent of A&E liability coverage purchased often depends on the specific needs of the insured. This is because different types of building professionals are exposed to unique claims that are linked to the specialized services that they provide.
For example, an HVAC engineer may want a modified exclusion for pollution. The amount of deductibles and liability limits may vary according to the policyholder’s needs.
It is important to note in cases of overlapping coverage offered by different insurance companies that the insurers may wind up in court to settle the issue of who is responsible for paying the claim.
Common coverage gaps with A&E liability policies include overseas projects, blended design and manufacturing, contractual liability, custom technology solutions, and cyber liability. While most A&E policies provide global coverage, this usually only includes the U.S. definition of liability. Finding policies that provide coverage for contractual liability in the event that another country’s laws do not follow the same guidelines as the U.S. can help close this gap. Every architect and engineering firm should consider their own unique risk profile, including their area of practice and scope of work, as well as the type of projects and clients when purchasing A&E liability coverage.