Why Timing is Everything: Claims-Made vs. Occurrence Engineering Insurance
You’ve finished the project, stamped the drawings, and moved on to the next big build. But in the engineering world, your liability doesn't end when the site trailers leave.
If a structural issue or design flaw is discovered five years from now, will your current insurance policy actually respond? The answer depends on two technical words: Claims-Made.
Understanding the difference between Claims-Made and Occurrence coverage is the most critical part of an engineer’s risk management strategy. For Ontario firms, getting this wrong doesn’t just mean a denied claim, it could mean personal financial exposure long after you’ve retired.
The Core Difference: Brain vs. Boots
In the insurance industry, we often distinguish between your "Brain" (professional design work) and your "Boots" (physical presence on-site).
Professional Liability (E&O): Claims-Made
Most Professional Liability (E&O) policies are Claims-Made. This means the policy must be active at two specific times:
- When the alleged error or omission occurred.
- When the claim is actually filed against you.
If you let your E&O policy lapse, even if you were insured when you did the work, you may have no coverage when the claim finally hits your desk.
General Liability (CGL): Occurrence
Your Commercial General Liability (CGL) is typically Occurrence-based. This covers physical "incidents" (like a slip-and-fall on-site) that happen during the policy period, regardless of when the claim is reported later.
Why This Matters for Your Career Transitions
Because engineering E&O is claims-made, you must be proactive during major life changes:
- Switching Jobs: If you leave a firm, you need to ensure the firm maintains coverage for your "Prior Acts."
- Retirement: You shouldn't just cancel your policy on your last day. You typically need "Tail Coverage" (Extended Reporting Period) to protect you from claims related to work you did years ago.
- Starting a New Venture: When launching a new firm, your "Retroactive Date" is vital. It dictates how far back your new policy will look to cover past professional acts.
The Roughley Advantage: Engineering Expertise
As an engineer myself, I know that your reputation is built over decades, but a single "timing gap" in an insurance contract can put that all at risk. We don't just shop for rates; we audit your retroactive dates and tail coverage to ensure your legacy is protected.
What should you do next?
- Check the "Retroactive Date" on your current E&O policy.
- Review your client contracts for "Extended Reporting" requirements.
- Talk to an Expert at Roughley to ensure your current coverage doesn't have a "timing gap."