The Reality: You’re Carrying More Risk Than You Think
Control engineers often work in technically demanding, high-liability environments. What might start as a software update or system reconfiguration could have ripple effects across entire production lines or critical services.
Here’s why your professional risk is unique and growing:
1. System Design Errors Can Have Expensive Consequences
A programming fault, timing issue, or sensor misconfiguration in a PLC might not cause immediate damage, but over time, it can lead to:
- Equipment fatigue or failure
- Safety breaches and environmental releases
- Loss of product or contamination
- Large contractual disputes over production losses
These are not “what ifs”; they are real-world claims we have seen as brokers.
2. Cyber Exposure is No Longer Optional
The line between operational technology (OT) and information technology (IT) is disappearing. Remote access, IoT, cloud-based SCADA platforms all offer huge efficiencies, but they also open the door to:
- Ransomware attacks shutting down entire systems
- Malicious access to valves, pumps, or dosing systems
- System corruption from insider threats or poor credential hygiene
And when your client suffers a breach, the first question is: who had access, who configured this, and who is liable?
3. You’re Signing Complex Contracts, Often Without Advice
If you’re working as a subcontractor or solutions provider, you’re likely signing agreements that include:
- Broad indemnity clauses
- Requirements to carry minimum insurance levels (often far above your own limits)
- Uncapped liability or fitness-for-purpose obligations
- Duty to defend and hold harmless clauses
Too often, we see these signed without legal review or insurance guidance, leaving engineers with uninsured liabilities or policies that will not respond when it matters.
The Insurance Products You Need, And What They Should Actually Do
You’re not buying insurance just to tick a box. You need a defence mechanism, one that actually responds to the complexity of your work and contracts.
Here’s what a well-structured insurance program should look like for an automation firm or control engineer:
1. Professional Indemnity (PI) Insurance
The cornerstone of your protection. This should cover:
- Errors in design, programming, commissioning, or system logic
- Software and firmware faults causing downstream losses
- Breach of contract where it arises from professional services
- Defence costs, expert reports, and legal negotiations
But not all PI policies are equal. You want:
- Contractual liability extensions (for assumed liabilities)
- Civil liability wording, not just negligence-based
- Inclusion of tech services like remote monitoring or code deployment
Many policies are written for consultants or designers, not system integrators or embedded engineers. That is why tailored wording matters.
2. Cyber Liability Insurance
SCADA and PLC vulnerabilities are now recognised as critical infrastructure threats. Your cyber policy should include:
- Third-party liability if a breach occurs via your systems or credentials
- Business interruption if your systems are taken offline
- Access to incident response teams and forensic support
- Cybercrime extensions, including social engineering and phishing
Key warning: Many cyber insurers exclude industrial control systems or bodily injury/property damage resulting from cyber incidents. If your broker doesn’t understand this nuance, you could be exposed.
3. Public and Products Liability
Still essential, especially for engineers who:
- Work on client sites
- Install or supply hardware and software components
- Interface with third-party contractors
Ensure it includes product liability for any control elements or software you deliver.
4. Management Liability (for Directors and Officers)
If you’re running an automation firm, this protects you as a business owner:
- Workplace investigations (e.g. WHS claims)
- Unfair dismissal or discrimination
- Statutory liability (e.g. EPA fines, ASIC inquiries)
- Director mismanagement claims
Often overlooked, but a must-have for SMEs in technical fields.
Contracts: Where Risk Is Hidden in Plain Sight
Contracts are one of the largest drivers of uninsured claims we see. Engineers regularly accept terms that:
- Exceed their insurance coverage
- Remove rights of contribution or subrogation
- Shift full liability for system performance (or even outcomes)
This is not just a legal issue, it is an insurance issue.
A specialist broker should review these contracts before you sign, advising on:
- Whether your insurance will respond
- What amendments may be needed
- Whether you need to increase limits or purchase project-specific cover
This proactive review could save you tens or even hundreds of thousands of dollars in claim denials or uncovered legal costs.
Why Work With a Specialist Broker?
You don’t do off-the-shelf work, so why settle for an off-the-shelf insurance solution?
At KBI, we work with automation specialists, control engineers, and tech-forward engineering firms across Australia. We don’t just find you a policy; we help you build a defensible position, aligned with the risks you carry and the work you perform.
A good broker should:
- Understand your technical scope of work
- Negotiate coverage tailored to PLC, SCADA, DCS, HMI, and remote monitoring
- Review contractual indemnities and insurance clauses
- Help you manage claims with technical context
- Advocate for you when insurers push back
We are not just selling policies; we are protecting engineering businesses.
Real-World Claims We’ve Seen
- A control software malfunction in a pharmaceutical plant caused contamination of an entire batch. The client sought $1.8 million in lost revenue.
- A remote access tool was left active after a job and later exploited in a breach, leading to downtime and regulatory fines. The engineer’s cyber policy was void due to poorly worded exclusions.
- A system integration fault delayed the commissioning of a mining conveyor by three weeks, triggering $400,000 in liquidated damages against the engineer.
In all cases, proactive broking advice made the difference between a managed claim and a business-threatening disaster.
Final Thoughts
Engineers like you are building the future of industrial automation. But in doing so, you are also assuming significant, and often misunderstood, liabilities.
The smartest approach? Treat insurance as a risk management tool, not just a compliance task.
Work with a broker who:
- Understands your industry
- Speaks your language
- Brings technical and contractual awareness to the table
Because when the pressure is on and something does go wrong, you will want someone in your corner who truly understands how your world works.
Disclaimer:
KBI PTY LTD is an Authorised Representative (450152) of KBI Group Pty Ltd (ABN 56 167 437 121, AFSL 494792). Any advice in this article is general in nature and does not take your personal circumstances into account. When considering the purchase of an insurance policy, you should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the KBI Financial Services Guide and relevant product disclosure statement.
