HVAC & Mechanical Engineer Insurance: PI & Liability Cover
Get customised insurance that covers your real risks as HVAC and mechanical services engineers, from design errors and system failures to bodily injury on site and project delays.
What is HVAC & Mechanical Engineer Insurance?
This specialist insurance is coverage designed for professionals who provide technical services, advice, or design for building systems. While Professional Indemnity (PI) is the core policy, this cover is often referred to simply as "HVAC Insurance" and typically includes essential policies like Public Liability.
It is essential for sole traders, partnerships, and incorporated engineering firms working on commercial, industrial, or high-end residential projects across Australia.
Covered Disciplines
- HVAC Engineers
- Mechanical Services
- Hydraulic Engineers
- Refrigeration Designers
- Fire Protection Systems
Complex Systems. Complex Liabilities.
One design error can affect air quality, temperature control, and safety across an entire building.
What Insurance does a HVAC & Mechanical Services Engineer Need?
For most HVAC and mechanical engineers, two policies form the foundation of your risk management. These are almost always required by contracts.
Professional Indemnity (PI)
Essential for Design & Advice
Protects you if a client claims your design, advice, or supervision was wrong and caused them financial loss (e.g., an undersized air-conditioning system leads to high energy bills or mould issues).
Public & Products Liability
Essential for Site Access
Covers third-party bodily injury or property damage caused by your operations (e.g., a refrigerant leak damages a floor) or the goods you supply (e.g., a fan blade detaches).
Other Insurances to Consider
Workers’ Compensation
Mandatory if you have employees.
Commercial Motor
For work utes, vans, or trailers.
Tools & Equipment
Testing gear, laptops, and tools.
Cyber Insurance
Protect client data and building plans.
Protecting Your Firm: Why HVAC Insurance is Essential
A single design mistake in a hospital, data centre, or high-rise can lead to claims costing millions.
Australian courts and certification bodies (NER, RPEQ, VBA) expect engineers to hold adequate PI. Without the right policy, you risk personal bankruptcy and loss of registration.
Smoke Extraction Failure
A mechanical firm designed an undersized smoke-extraction system which resulted in increased fire damage.
Refrigerant Error
A refrigeration consultant specified the wrong refrigerant leading to premature compressor failures across a supermarket chain.
Mould Remediation
HVAC engineer installed incorrect duct sizing which caused mould in a school, leading to extensive remediation costs.
Project Delays
Late drawings from the mechanical engineer delayed handover, resulting in a liquidated damages claim.
PI Coverage & Exclusions for HVAC
Typical Inclusions
- Design defects in HVAC, refrigeration, or fire systems.
- Faulty specifications leading to energy inefficiency claims.
- Bodily injury from falling ductwork or leaks (via extensions).
- Defence costs, even if the claim is groundless.
- Project delays caused by your error (via extensions).
Standard Exclusions
- Known defects or omissions (Prior Knowledge).
- Asbestos-related claims.
- Gradual pollution.
- Fines, penalties, or punitive damages.
- Wear and tear or faulty workmanship (unless Contract Works).
Claim Scenarios & FAQs
Real world examples and common questions.
Claims alleging a financial loss due to a "failure to design to specification," such as an undersized system, are typically the primary function of Professional Indemnity (PI) insurance. Your policy would usually appoint a defence team to assess the claim.
Yes. Peer review, value engineering, and due-diligence work involve providing professional advice and opinions, which carries a significant risk of professional negligence exposure. If your review misses an error that causes a subsequent loss, you could be held liable.
The claim for bodily injury would typically be managed under your Public Liability policy. However, if the injury resulted directly from a failure in your design, your PI policy may also need to respond. It is essential to notify both insurers.
It is increasingly recommended. Many firms now use cloud-based BMS design software and hold client building data. Given the increasing regularity of ransomware attacks, a dedicated Cyber policy is a prudent business measure.
Most PI policies written strictly for consultancy firms contain an exclusion for "Contracting" or "Installation" work. You must contact us to rewrite or endorse your policy before you sign the first D&C contract.
Ready to protect your HVAC business?
Secure the comprehensive cover you need for compliance and peace of mind.