Engineering Business Insurance (2025)

Engineering business insurance protects your firm in the event of accidents, legal claims, or professional errors that may occur during operations. For example, if a client or third party is injured due to a site hazard or if a design flaw leads to costly damages, your insurance can cover the associated legal and compensation costs.

Engineering insurance ensures your practice can remain operational by helping you manage risks such as workplace injuries, equipment damage, and liability claims resulting from professional mistakes.

Why Do Engineering Businesses Need Insurance?

Engineering businesses need insurance because accidents and mistakes can happen at any time. Without insurance, one error could cost a lot of money. For example, if an engineer makes a design mistake that causes damage to a building or delays a project, the company could be held responsible and have to pay for repairs or losses.

There are also other risks, someone could get hurt on a job site, expensive tools or equipment could be damaged, or a client might sue the business for professional errors. Insurance acts like a safety net. It helps pay for legal costs, property damage, injuries, or other claims, so the business doesn’t have to pay everything out of pocket.

Having insurance also makes your business look more trustworthy. Many clients and contractors will only work with engineers who have proper insurance. Whether you’re working alone or running a full team, the right insurance helps protect your business and gives you peace of mind.

What Insurance Do Engineering Businesses Need?

Running an engineering business involves more than just math and physics. You face daily risks ranging from calculation errors to heavy machinery accidents. A simple oversight in a design or a mishap on a construction site could lead to a lawsuit. If a client loses money or someone gets hurt, your company is financially liable.

Here is a guide to the specific insurance policies that keep engineering businesses safe.

Professional Liability Insurance

This is perhaps the most critical coverage for engineers. It shields your business from claims that your professional services, advice, or designs caused a client financial loss. It covers you against allegations of negligence, design errors, and omissions. Even if you did nothing wrong, a client might still sue, and this policy covers the expensive legal fees to defend you.

Example: You design the structural plans for a retail complex. During the build, the contractor realizes a beam specification is incorrect, delaying the project by weeks. The client sues you for the delay costs. Professional liability covers your legal defense and the settlement costs.

Business Owner’s Policy (BOP)

A Business Owners Policy is a convenient package that bundles general liability and commercial property insurance together. It is usually cheaper than buying these policies separately. This bundle protects your office space, your specialized equipment, and your business assets against theft, fire, or damage.

Example: A pipe bursts in your office building over the weekend. The water destroys your computers, expensive plotting printers, and office furniture. A BOP pays to replace this equipment so you can get back to work quickly.

Commercial Auto Insurance

Personal car insurance policies rarely cover accidents that happen while driving for work. If your engineers drive to job sites or client meetings, you need commercial auto insurance. This policy covers medical bills, vehicle repairs, and legal costs if a company vehicle is involved in a crash.

Example: One of your structural engineers is driving to a site inspection and accidentally backs into another contractor’s truck. Commercial auto insurance pays for the repairs to the other truck and any medical checks needed.

On average, engineering businesses pay around $110 per month, or $1320 per year, for this type of coverage.

Workers’ Compensation Insurance

If you have employees, you likely need this coverage by law. Workers’ compensation pays for medical care and lost wages if an employee gets sick or hurt because of their job. It protects your staff financially while protecting your business from lawsuits related to workplace injuries.

Example: A field engineer trips over debris at a construction site and fractures a leg. Workers’ compensation pays for the surgery, physical therapy, and a portion of their wages while they are unable to work.

General Liability Insurance

This is the baseline protection for most companies. It covers third-party bodily injuries, property damage, and personal injuries (like slander). If your business operations accidentally hurt a non-employee or damage someone else’s property, this insurance steps in to pay for repairs or medical bills.

Example: While visiting a client for a consultation, you accidentally knock over an expensive prototype model on their desk, shattering it. General liability insurance covers the cost to replace the client’s property.

Cheapest Business Insurance For Engineering Business

The cheapest provider for overall business insurance is Hiscox, with an average annual cost of $568.

Note: These estimates are for a small engineering consultancy with low annual revenue and a clean claims history. Business insurance costs are highly sensitive to your specific discipline (e.g., structural vs. software), the total value of the projects you work on, and the liability limits required by your client contracts. Actual premiums will vary.

Cheapest Engineering General Liability Insurance

The cheapest provider for General Liability Insurance is biBERK, with an average annual cost of $362.

Note: These estimates are for a firm with a small, leased office space and few employees. General Liability costs are primarily influenced by your physical operations, including the risk of client injury at your office (foot traffic), potential damage to third-party property, and your advertising activities (e.g., slander or libel). Actual premiums will vary.

Cheapest Engineering Business Owner’s Policy

The cheapest provider for a Business Owner’s Policy (BOP) is biBERK, with an average annual cost of $521.

Note: These estimates are for a firm bundling General Liability with a basic Commercial Property policy to cover standard office equipment (like computers and furniture). BOP costs are driven by the total value of your business property, your office’s location (factoring in fire and theft risk), and your firm’s annual revenue. Actual premiums will vary.

How Much Does Engineering Business Insurance Cost?

Engineering business insurance usually costs between $450 and $1,000 per year for general liability coverage, depending on how big your business is and what kind of work you do. If you work alone with no employees, your insurance cost is often lower.

But if your engineering business is growing, has several employees, uses company vehicles, or needs extra coverage like workers’ compensation or equipment insurance, your costs can be higher, sometimes over $2,000 a year.

The price of business insurance depends on many things, such as where your business is located, how many people you employ, the kind of engineering services you provide, your past claims, and whether you use expensive tools or machinery.

Insurers also look at how much coverage you want and if you buy multiple policies together. While choosing the cheapest insurance might seem good, it’s more important to pick a plan that truly protects your business from the risks it faces.

Note: These figures are estimates for small engineering firms. The costs are based on policies with standard coverage limits, a small number of employees, and a favorable claims history. Actual premiums will vary based on your firm’s specific details, including location, size, annual revenue, number of employees, and coverage limits.

How Is Your Engineering Business Insurance Cost Calculated?

Insurers analyze several key details to set the premium for your engineering firm. The size of your operation is a major factor in this calculation. A freelance engineer generally pays much less than a large agency with a full staff.

Your daily tasks and projects also affect the price. High-risk activities or work on hazardous job sites will usually increase your rate. Your business location matters as well since coverage costs vary significantly by state and zip code.

Providers will look at your track record, too. If you have filed claims in the past, insurers may view you as a higher risk for future issues. Finally, the value of your technical equipment, your need for commercial vehicles, and your chosen policy limits will all impact the final figure.