Short Answer
There's no fixed number.
Professional liability (E&O) premiums for structural engineers depend on the firm's revenue, project types, claims history, limits, and location, among other factors. Some firms use a rough benchmark like a percentage of revenue to sanity-check pricing, but that benchmark can be misleading without looking at the underlying risk factors. The only reliable way to know if a quote is reasonable is to compare it against your firm's actual exposure, not a general rule of thumb.
What Affects Structural Engineer Insurance Cost?
Underwriters generally look at a combination of factors, including:
- Annual revenue
- Types of projects (residential, commercial, healthcare, infrastructure, etc.)
- Contract terms the firm typically signs
- Claims history
- Limits and deductible selected
- Years in business and staff experience
- Subconsultant use and oversight
No single factor determines the premium on its own. Two firms with similar revenue can see very different pricing if their project mix or claims history looks different.
How Do Project Types Affect Structural Engineer Insurance Cost?
Generally, yes.
Structural work tied to higher-severity project types, such as healthcare facilities, high-rise buildings, or critical infrastructure, tends to carry more underwriting scrutiny than lower-severity project types. This isn't a hard rule for every underwriter, but it's a common pattern in how premiums get priced.
Does Revenue Affect Structural Engineer Insurance Cost?
It can. Some states and jurisdictions see more litigation activity or different statutes of limitations and repose, which can factor into pricing. Location isn't usually the biggest driver on its own, but it's one of the variables underwriters consider.
How Does Claims History Affect Structural Engineer Insurance Cost?
Often, yes, though the effect depends on the nature, size, and recency of the claim. A single small claim from years ago typically has less impact than a recent, large, or open claim. Underwriters also look at what caused the claim and whether the firm made changes in response.
Is 2% of revenue a reasonable benchmark?
It can be a rough starting point for conversation, but it shouldn't be treated as a rule. A firm with clean contracts, a strong claims history, and lower-risk project types may reasonably pay less than that. A firm with more claims activity or higher-severity work may reasonably pay more. Benchmarks like this are useful for a gut check, not for confirming whether a specific quote is fair.
Example
Two structural engineering firms both have $2 million in annual revenue.
Firm A works primarily on single-family residential projects, has no claims history, and carries a $1 million professional liability limit.
Firm B works on hospital and high-rise commercial projects, has one prior claim, and carries a $2 million limit.
Even though both firms are the same size by revenue, Firm B's premium would reasonably be expected to differ from Firm A's, because the underlying risk factors aren't the same. Comparing the two premiums as a percentage of revenue alone wouldn't tell you much about whether either firm's pricing is fair.
What to check
If you're trying to evaluate whether your firm's professional liability premium is reasonable, look at:
- What limit and deductible the premium is actually based on
- Whether your project mix has shifted since your last renewal
- Whether any claims have been reported, and how they were resolved
- How long it’s been since you’ve gotten a second opinion or comparison quote
- Whether your contract language is creating unnecessary exposure that’s driving up cost
- What specific factors your current broker or underwriter cited for your pricing
Related Questions
How do I know if my engineering firm is overpaying?
The clearest way is to have your current policy and pricing reviewed against your actual project mix, claims history, and contract terms. A premium that looked fair five years ago may not reflect your firm's risk profile today, especially if your project types or revenue have changed and you haven't gotten a comparison since.
Professional Liability
Helps respond when a client alleges your professional services caused a financial loss, project issue, or other damages.
Structural Engineers
For covered employee injuries tied to work. This can include office injuries, travel-related work injuries, or incidents during job site visits.
Civil Engineers
Infrastructure design and site development carry technical liability tied to calculations and performance specifications. .