Study Ranks Insurance Risk Levels for Design Professionals

Engineers are "low-risk" when it comes to insurance claims, while architects are considered a "higher-than-average" risk, according to a recent study completed by DPIC Companies, a Monterey, Calif.-based professional liability insurance company for design professionals.

By Staff March 4, 2002

Engineers are “low-risk” when it comes to insurance claims, while architects are considered a “higher-than-average” risk, according to a recent study completed by DPIC Companies, a Monterey, Calif.-based professional liability insurance company for design professionals.

Based on an analysis of insurance claims filed with DPIC between 1996 and 2000, the study shows that out of all the design disciplines, electrical engineers only account for 1% of claims dollars paid, while contributing 4.2% of the total fees collected by DPIC. At a slightly higher risk—but still considered low—mechanical engineers accounted for 7.6% of total claims dollars during these years, while paying 8.8% of the insurance premiums collected.

Architects, on the other hand, represent 44% of claims dollars, as compared to 39.6% in fees. These numbers have increased since DPIC’s last study, which analyzed claims from 1989 to 1995, and reported architects as accounting for 37% of claims dollars paid, while contributing 35% in fees.

The recent study also lists the top four non-technical factors contributing to claims as:

  • Communication issues.

  • Project team capability issues.

  • Client selection.

  • Negotiation and contract issues.

For more information on this study, see DPIC’s web site at: www.dpic.com .