The Situation
A Victorian geotechnical consultant had been working on some of Australia's largest infrastructure projects - tunnelling works and metropolitan rail builds. Their revenue was modest relative to the project values they were advising on, but insurers don't price geotechnical PI based on revenue alone. The aggregate exposure from megaproject involvement was the key pricing driver.
Our Approach
We went to specialist engineering PI markets that understand infrastructure work. The submission detailed the specific nature of the geotechnical consultancy - soil and rock analysis, foundation design recommendations, site investigation - and clearly delineated between advisory work and any construction activities. We provided project lists to demonstrate the scope.
Challenges
The main challenge wasn't getting cover - it was the price. When geotechnical engineers work on projects worth hundreds of millions or billions, the potential liability from a geotechnical error is enormous. Foundation failures, tunnel collapses, soil instability during construction - the consequences are catastrophic and the claims are massive. Insurers price accordingly, regardless of the consultant's own revenue.
The Outcome
Terms were obtained from specialist markets at over $100,000 for $5M PI. That's a significant premium, but for the level of exposure involved, it reflects the genuine risk. The consultant understood that megaproject work commands megaproject premiums. The alternative - being uninsured or underinsured on a landmark project - wasn't an option.
Broker Insight
If you're a geotechnical engineer working on major infrastructure, don't be surprised by high PI premiums. The insurer isn't looking at your revenue - they're looking at what happens if your soil report is wrong and a $2 billion tunnel project has foundation issues. That said, not all insurers price megaproject exposure the same way. Shopping the market through a broker who understands engineering risk can still save you tens of thousands.