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What is the cost of engineers insurance?

The cost of Engineers Insurance in Australia starts from around $1,500 annually for low-risk sole traders, but frequently rises to $5,000 to $10,000+ for high-risk disciplines like Structural Engineering.

Premiums have no flat rate and vary significantly, driven primarily by your required Limit of Indemnity and your Annual Revenue. Below, we break down exactly what determines your final premium and provide real-world cost benchmarks.

Six Core Factors Driving Your Premium

These are some of variables underwriters use to calculate your final premium

1. Engineering Discipline & Type of Work

This is the single most important factor. Premiums reflect the potential for catastrophic or expensive failure:

‍High-Risk Minimums: Disciplines like Structural and Geotechnical engineering face the highest minimum premiums due to the catastrophic nature of potential failure.

‍Overseas Exposure: Work conducted in the USA is usually excluded and, if covered, requires an endorsement that will attract a significantly higher rate due to its litigious environment.

2. Annual Revenue / Professional Fees

As your revenue (professional fees) increases, so does your risk exposure.

‍Premium Escalator: The primary factor that pushes a high-risk firm’s premium from the $10,000 range into the $20,000+ range is an increase in Professional Fees (Revenue), as this signifies a larger volume of work and greater exposure.

3. Limit of Indemnity (Cover Level)

The amount you are insured for (e.g., $1M, $5M, $10M).

Cost Correlation: Higher limits require higher premiums, as the insurer takes on a greater financial liability for potential claims.

4. Claims History and Risk Management

Claims Review: Insurers typically review any previous claims or circumstances for the past five to seven years. A clean record helps lower the premium.

‍Risk Management Value: The strongest applications that secure the best terms and pricing are those that include detailed, documented risk management procedures (e.g., peer review processes, quality control checklists). This demonstrates genuine risk mitigation to the underwriter.

5. Contractual Exposure

Your contractual terms impact risk.

‍Uncertainty: Contractual terms that impose unlimited liability or "fitness for purpose" clauses, or complex project risks, make the risk difficult to define and usually result in a higher premium.

6. Excess (Deductible)

The out-of-pocket amount you agree to pay for each claim.

‍Strategic Use: Choosing a higher excess is a key tool for managing premium costs. By accepting a greater initial liability, you signal confidence to the underwriter, which can lead to a lower quoted premium.

Typical Cost Benchmarks (Annual Premiums)

These ranges are indicative and heavily dependent on your revenue, experience, and specific discipline
‍

Scenario	Discipline / Exposure	Typical PI Cost Range
Minimum Start-Up	Low-Risk (e.g., Acoustic, Traffic)	From $1,500
Sole Trader (High-Risk)	Structural, Geotechnical (Low Revenue)	$5,000 – $10,000+ (Due to high minimum premiums)

Cost of Other Essential Covers

Public Liability (PL)

Calculation: Unlike PI (which focuses on revenue), the premium for Public Liability is generally calculated based on staff numbers and the nature of on-site activities.
Small Business Pack: For an office-based small business, a basic Business Pack (covering contents, theft, etc.) typically costs between $2,000 to $3,000 annually, depending on the value of the assets insured.

Run-Off Cover

Cost Calculation: Run-Off cover (required when you cease trading) is typically charged at 100 percent of the last annual PI premium in the first year, then gradually decreases in subsequent years.

How to Strategically Lower Your Premium

Three Actions to Improve Your Risk Profile

Document and Submit Procedures: Have documented risk management procedures in place, and ensure they are included in your application submission.
Clarify Your Scope: Be absolutely clear about the type of work you perform. Incorrectly declaring exposure to high-risk work (e.g., a hint of geotechnical work when you are primarily Civil) can unnecessarily increase your premium.
Use a Specialist Broker: We impact your cost directly by having access to specialised markets and the ability to negotiate. A strong, well-packaged submission allows us to leverage your expertise for better pricing and terms than a generalist broker.