Short answer
Most new commissioning firms start with professional liability insurance, also called errors and omissions (E&O). Many add general liability once a client or lease requires it. Commissioning firm insurance should match the reviews, testing and reports you provide. Coverage depends on the actual policy terms, exclusions and underwriting, so read each quote before you bind.
What commissioning firm insurance you need on day one
Three terms come up first, and they overlap.
Professional liability and E&O are the same thing. Both respond to claims that your professional services caused a client a financial loss. For a commissioning agent, that could be a missed system deficiency that an owner later says should have been caught.
General liability covers bodily injury and property damage from your business operations. Damage to a client’s equipment during a site visit is one example. It does not cover errors in your professional work.
A business owner’s policy (BOP) bundles general liability and business property coverage. It can suit a small firm with an office and equipment. It usually leaves out professional liability, so most firms still need that policy separately.
Day one often looks like this:
- Professional liability, because clients usually ask for it before they sign.
- General liability or a BOP, once a client, landlord or contract requires it.
- Workers’ compensation, once you hire employees. Rules vary by state.
What your first clients will ask for
Owners, architects, engineers and contractors often send insurance requirements before the contract is final. Common requests include:
- Limits. The most the policy pays for a claim, usually stated per claim and for the policy year.
- Additional insured status. A request to add the client to your general liability policy. It does not usually apply to professional liability.
- Waiver of subrogation. An agreement that your carrier will not pursue the client to recover what it paid.
- Certificates of insurance. A one-page summary of your coverage that your broker issues.
Commissioning work adds its own contract issues. Watch for clauses that guarantee system performance or require you to certify that equipment meets the design intent. Others require you to indemnify the client for claims you did not cause. Many policies exclude liability you take on only through a contract, so those promises can go beyond your coverage.
What commissioning firm insurance costs and why
Cost varies by state and carrier, so we do not publish figures. These factors usually shape the price:
- Annual revenue, since carriers often price against it.
- Services offered, such as design review, functional testing, retro-commissioning or building diagnostics.
- Project types, since hospitals, labs and data centers can carry different risk.
- Limits and deductible you choose.
- Claims history and years in business.
- Contract terms you accept.
A new firm with no claims history may find fewer carrier options than an established one. A broker can show which carriers write commissioning work and how each treats your services.
Want this looked at for your firm?Tell us what your firm does. A specialist reviews it and comes back with options.
Get a Quote →Admitted vs. non-admitted carriers and ratings
Some contracts require an admitted carrier, which means one licensed in the project state. Others set a minimum A.M. Best rating. Neither is automatically better, but your contract may require one or both.
We cover both topics in admitted vs. non-admitted insurance and what A- VII or better means. Check the requirement before you bind.
A commissioning firm insurance timeline
Your needs grow with the firm. A typical path looks like this:
- First client. Professional liability, and a certificate for the client.
- First employee. Workers’ compensation, and an updated professional liability application, since headcount and revenue can change.
- First office. General liability or a BOP, plus coverage for testing and measuring equipment.
- First big contract. A review of required limits, additional insured wording and project-specific requirements.
- $1M in revenue. A broader review of limits, umbrella coverage and other lines, such as cyber liability if you store building system data.
These are guideposts, not rules. Your own contracts will tell you when to act.
What to check on any quote
- Does the policy describe your commissioning services accurately, including testing and design review?
- Do any exclusions affect services you sell, such as building diagnostics or design work?
- Do the limits and deductible match your contracts?
- Does defense cost sit inside the limit or outside it?
- What is the retroactive date, and what coverage applies to prior work?
- Is the carrier admitted or non-admitted, and what is its rating?
- What is the total cost, including fees, taxes and any financing?
What makes commissioning work different
Verification without control. You test and verify systems that other firms design and install. If a system fails later, your firm can be named even though you did not design or build it.
Performance language in contracts. Owners often want assurance that systems will perform as intended. A promise of results can go beyond a professional liability policy, so review that wording before you sign.
Do commissioning agents need professional liability insurance?
Many clients require it, and your reviews and reports carry real exposure. Whether your firm needs it depends on your contracts and services, so ask a broker to review them.
Can a commissioning firm be named in a lawsuit over a system it did not design?
Yes, it can happen when a building system problem leads to a dispute among several parties. Being named differs from being found responsible, but defense costs can still add up.
Does a BOP include professional liability?
Typically no. A BOP combines general liability and property coverage. Check the form, since some carriers offer limited professional options.
Does coverage change if I add design review or building diagnostics?
It can. Tell your broker before you add services, since some policies treat them differently.
When should I review my coverage as the firm grows?
Review it when you hire, move into an office, sign a larger contract or approach $1M in revenue. Changes in revenue or services can affect your policy.
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Tell us what your firm does and your revenue. We will come back with what carriers would actually charge.
