Short Answer
Engineers who provide professional services to a project or company they own should not automatically assume those services are covered under their standard professional liability policy. Related entity coverage can be affected by how the policy defines who the services must be performed for, whether a fee is required, and whether any exclusion applies to work involving an ownership interest. This arrangement should be disclosed to the broker and checked against the actual policy wording.
Why "performed for others" language matters
Many professional liability policies define covered professional services as those performed for a client, or performed "for others," rather than for the insured's own benefit. If an engineer owns both the firm performing the work and the company receiving it, that language raises a real question about whether the arrangement fits the policy's intent, even if no one involved sees it as a problem.
This isn't a universal exclusion built into every policy. It depends entirely on how the specific form defines covered services and whether it addresses affiliated or related entities directly.
Fee or business consideration requirements for engineering work services
Some policies require that professional services be performed for a fee or other business consideration to qualify as covered. If an engineer's firm performs work for their own development company without charging a fee, or without any documented consideration changing hands, that detail could matter if a claim arises and the carrier reviews how the engagement was structured.
Related-entity provisions
Some policies include specific provisions addressing work performed for a related entity, meaning a company that shares common ownership, control, or an affiliate relationship with the insured firm. These provisions can limit or exclude coverage for that specific work, separate from how the general professional services definition is written. Not every policy has this kind of provision, and where one exists, the definition of "related entity" varies by form.
Ownership interest and insured-vs-insured exclusions
Some policies include an exclusion resembling an "insured-vs-insured" provision, which can limit coverage for disputes involving an entity the insured owns or controls. These exclusions are more commonly seen in management liability policies but sometimes appear in professional liability forms as well. Whether it applies to a specific engineering firm and development company structure depends on the exact policy language.
Written-contract requirements for engineering work services
If the policy also requires professional services to be performed under a written contract, an engineering firm working informally for its own affiliated development company may not have the same kind of documentation it would use with an outside client. That combination, an ownership relationship plus no written contract, compounds the uncertainty about whether the arrangement is covered.
Why this arrangement should be disclosed
None of these provisions automatically mean coverage doesn't exist. They mean the arrangement needs to be reviewed against the specific policy rather than assumed to work the same way as engineering services performed for an unrelated client. Disclosing the ownership structure to the broker allows the carrier to confirm how the policy treats it, or to offer an endorsement if needed.
Example
An engineer owns Company A, a structural engineering firm, and Company B, a real estate development LLC. Company A provides structural engineering services for a project being developed by Company B, but no fee is charged between the two entities.
Before assuming this arrangement is covered under Company A's professional liability policy, the engineer should confirm with the broker whether the policy's professional services definition, fee requirements, and any related-entity language actually contemplate work performed for an affiliated company without a fee.
What to check in your own policy
- Review whether the professional services definition requires work to be performed “for others” or for a client
- Check whether the policy requires a fee or business consideration for services to be covered
- Look for any related-entity, affiliate, or ownership-based exclusion
- Confirm whether a written contract requirement applies, and whether one exists between the affiliated entities
- Disclose any ownership overlap between the firm and the project or company receiving services
Related Questions
Is engineering work for my own company automatically excluded from E&O coverage?
Not automatically. It depends on how the specific policy defines professional services and whether it includes any related-entity or ownership-based exclusion.
Does it matter if I don't charge a fee for the work?
It can. Some policies require services to be performed for a fee or other business consideration to qualify as covered professional services.
What counts as a related entity for insurance purposes?
This varies by policy. Some forms define it based on ownership percentage, common control, or an affiliate relationship. Check the specific definition in your policy.
Should I set up a contract between my two companies?
Many brokers recommend documenting these arrangements the same way you would for an outside client, though the right approach depends on your specific structure and policy requirements.
Who should I talk to about this kind of arrangement?
Your insurance broker, since they can review the specific policy language and discuss it with the carrier if the arrangement needs to be disclosed or endorsed.
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Read MoreAuthor:
Hardcover Editorial Team
Reviewed by:
Hardcover Insurance Team
Last reviewed:
September 25, 2026
This article is educational and does not provide legal advice or determine whether a specific claim is covered. Policy terms, exclusions, underwriting requirements, and applicable law vary. Consult your insurance professional and qualified legal counsel regarding your circumstances.