Engineering Ethics: Professional Indemnity Claims

This article takes a look at what a constitute a claim within the purview of a structural engineer, how they may arise and the steps the structural engineer can take to mitigate them.

shows an engineer and his client investigating a potential claims

Let’s begin this article with a tale.

Dave was appointed to the position of structural engineering consultant by a client who sought to build steel warehouses. Dave had overall responsibility for analysis design as well as conducting routine site inspections to ensure compliance to design specification. During the design phase, David had proposed simple fin connections for most of the steel frame elements. However, during the construction phase, it became apparent that fin connections weren’t appropriate for many of the steel elements, hence the need to revert to a more robust but significantly expensive steel connection. Arguments and counterargument quickly ensued between the client and Dave. The client argued that cost was agreed with the contractor based on the initial design. Ultimately, the client agreed to this change, but not without a claim against Dave.

For the engineer, the idea of a ‘claim’ does not go without a feeling of apprehension. In many instances, it almost always starts as a criticism of the engineer’s work which invariably and ultimately leads to a demand for recompense. In some instances, it could just be a threat of a claim, where costs are yet to be defined, that sets in a train of investigations, arguments, counterarguments.

Claims, whether valid or not valid always comes with a sense of foreboding because the end result is always additional time/cost to be incurred by the engineer. These time/costs are not recoverable. Hence, an engineer must minimize the risks associated with claims. This article takes a look at what a claim is, how they may arise and the things that can be done to mitigate them.

What is a Claim?

A claim is a legal demand made by a person seeking compensation, payment, or reimbursement for a loss under a contract or an injury caused by carelessness. In many jurisdictions, claims may arise as a result of torts. Torts are acts of wrongdoing perpetrated by one person against another. As a result of the wrongdoing, the victim may file a civil suit against the other party. Claims against engineers are typically filed under contract, utilizing the deed of appointment, because the standard of evidence is lower than in a tort suit. Engineers are typically hired by contract using a deed of appointment, as the burden of evidence is lower than in a tort suit.

The majority of engineering claims will be financial demands as a consequence of a perceived breach of duty for failing to perform the services in the appointment with the requisite degree of competence, care, and attention. The claim might be related to a technical error, late information release creating delays, modifications to the design on which the client previously depended for expenses, or failure to advise the customer of risks that may result in additional time or cost.  

How Potential Claims Arise

Potential claims against structural engineers are often rooted in a range of issues. Deviation from original design, design errors, omissions, or negligence during design, construction, or even maintenance phases of a project.

Alterations & Modification to Design

Alterations and modification or significant deviation from the original design concept, form a vast majority of the claims instituted against structural engineers. Especially, the changes that occurs between the conceptual design phase of a project and implementation.

In many instances, a client decides on the viability of their project at inception. Many times, costing is even done on the basis of the conceptual design, without necessary cognizing the changes that could occur during design development or even implementation. Take the instance of the example provided at the opening of this article. When the client appointed a contractor to bid, the contractor only priced what appeared on the drawings. They did not price design development or elements not shown. Hence, when the connections were changed, this led to a significant increase in the initial cost of the project. And thus, it opened the door for a claim to be instituted against the structural engineer.  

Design Errors

Although not very common, design errors can form a basis for claims. Inadequate structural analysis or design will lead to construction flaws, compromising the safety and integrity of a structure. This could happen as a result of errors in calculations, load assessments, or material specifications, invariably opening the door for legal action or a claim against the structural engineer.

Miscommunication & Negligence

Many engineers receive threat of claims as a result of ‘failure to warn.’ Miscommunication or lack of communication is often the culprit here. Ineffective communication with clients, contractors, or other stakeholders may lead to misunderstandings and disputes. Failing to transparently communicate potential risks associated with the design or the construction process will result in a claim against you.

Cautionary Tale: A client hired a structural engineer for a cellar conversion project. Despite the engineer recommending reinforced concrete footings be introduced beneath the existing footings, the contractor opted for plain concrete, discarding the structural engineer's drawing. The engineer, noticing the deviation, reissued his drawing to the contractor and stressed the importance for the drawings to be followed, but failed to warn the client. Post-completion, cracks soon appeared, ultimately leading to a partial collapse of the structure. This ended in a claim instituted against the engineer for inadequate communication.

Similarly, where the duty of the structural engineer covers site inspections, he is duty bound to ensure that work is carried out to specifications. Negligence in inspections and assessments poses a significant risk. Insufficient site inspections can lead to inadequate quality control during construction resulting in a substandard work and thus, a potential claim against the engineer.

How to Mitigate Potential Claims

Deviation from original design which form the bulk of claims instituted against structural engineers can be mitigated by adopting a proactive disposition. It is important that you communicate beforehand what might be lacking from your drawings or any assumptions that underpins the design which could likely change in the future. This allows your client to become aware of a possible change and thus make reasonable allowance in the pricing of the design and associated construction risk.

Effective communication during the design development is very key. The client should be carried along from the initial concept up till the close of the project. It is best to formalize communication in writing: if a dispute leads to litigation, written communication has significantly more weight than verbal communication.

In summary, engineers can mitigate claims by adhering to a strict ethical standard. A combination of effective communication, comprehensive documentation, proactive risk management, and ethical conduct is crucial for a structural engineer to mitigate potential claims.

It is, however, possible for an engineer to adhere to the guidelines presented for mitigating claims here and still be a victim of a claim. A claim can also arise from vicarious liability. Self-employed engineers do not only pay for their mistakes. They also pay for the mistakes of their employees and subordinates. Hence, you cannot be too careful.  

Professional Indemnity Insurance

The ultimate guide against a claim is a Professional indemnity insurance. Professional indemnity also called (PI) insurance is what an engineer can get to guard against a successful claim. This will cover any monetary losses they sustain, less any excess that the insurers specify. Professional Indemnity Insurance (PI) serves as a safeguard for professionals across various industries, providing financial protection against claims arising from errors, omissions, or negligence in their professional services.

professional structural engineers

However, the legality of a PI insurance depends largely on prompt notification and truthful declarations, just like it does for many other insurance products. It is advised that engineers notify their insurers of any claims or possible claims as soon as they become known. Following a notification to the PI insurer, the insurer could want to be consulted in any correspondence with the claimant. Involvement from the engineer, insurer, and their advisors in the subsequent claim handling is crucial.

Engineers are far more likely to receive a claim from a contractor acting as a client than from a noncontractor customer, according to evidence from PI notifications. Working for contractors exposes engineers to more claims risk than working for other client bodies. That being said, this does not imply that contractors receive lower-quality service. Contractors may find it harder to control cost increases or delays, which makes them more likely to look for alternative ways to recoup expenses.

Evidence also points to the fact that contractor clients often prefer to avoid going to trial, therefore a business settlement centered on price schedules is frequently used to resolve disputes. Conversely, noncontractor clients in the public and private sectors are more likely to file a lawsuit in order to recoup their losses as a consequence of a claim.

Whether it’s a contractor or non-contractor client, Professional Indemnity (PI) insurance is a very convenient way of dealing with claims.  It serves as a safeguard, offering financial protection in professional services. PI insurance covers legal defense costs and any compensation awarded due to claims against the engineer’s work. It acts as a shield, providing peace of mind and financial security.

See: Engineering Ethics: Developing a Fee Proposal


A majority of structural engineers’ view claims as a very humorless issue. It is not just criticism of the engineers work but also loss of valuable time and scarce resources especially in this era of litigious society. Thus, it is important for engineers to understand how claims may be instituted against them and what they can do to mitigate these claims. Many early claims are the basis for a financial settlement between a client and his engineer rather than actual claims under law. These settlements may or may not be covered by PI insurance, but they can have a significant effect on the engineer’s business. Thus, it is important to pay attention to claims, how they arise and how they can be mitigated.

Sources & Citations

  • M Buck. (2017) ‘Professional Indemnity Claims. Business Practice Notes’, The Structural Engineer, 95 (11)
  • Griffiths and Armour (2016) ‘Engineers Guide to PI Claims. Parts 1–11’, The Structural Engineer, 94 (1, 2, 4–12).

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