The practice of engineering is regulated through licensure in all states.  Whether and under what conditions a state will allow engineers to practice through limited liability entities (“LLEs”) (e.g., corporations, limited liability companies, and limited liability partnerships) varies from state to state:

  • Some states do not regulate engineering LLEs at all.
  • Some states do not allow engineering LLEs unless all of the owners are licensed in that state.
  • Some states require only that the person in charge of the local office be licensed in that state.
  • Some states require an engineer to be designated as a responsible person for the engineering LLEs.[1]

The following states, and potentially others, require an engineer to be designated as a responsible person for an LLE:

  • Alabama
  • Alaska
  • Arizona
  • Connecticut
  • Delaware
  • Idaho
  • Kansas
  • Kentucky
  • Louisiana
  • Maryland
  • Mississippi
  • Nevada
  • New Hampshire
  • New Jersey
  • North Carolina
  • Ohio
  • Oklahoma
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Virginia
  • Washington

The designated responsible engineer goes by different names depending on the state:

  • Most states refer this person as the designated Engineer/Professional/Individual “in responsible charge”
  • Arizona refers this person as the “responsible registrant”
  • Louisiana refers this person as the “supervising professional”
  • Oklahoma, Illinois, and Maryland refer this person as the “managing agent”
  • Hawaii refers to this person as a “responsible managing employee”

Typical consequences of being the designee are as follows:

  • The designee could be held accountable for the work performed by the firm, particularly if the designee is also the Responsible Charge under whom work was done.
  • The designee will likely be responsible for ensuring that all professional services provided by the firm are performed by or under the responsible charge of licensed professionals.
  • The designee may be subject to disciplinary action by the state licensing board for “aiding and abetting” the LLE in a violation of statutes or rules committed by firm.
  • The designee is may be required to sign the LLE’s application for renewal of the firm’s license and to notify the board of any change in the firm’s supervising professionals, and may be held accountable for any errors or omissions in the renewal application, or for the failure to timely make a required notification to the licensing board.

In most states where LLE’s are licensed, violation of applicable licensing law or aiding and abetting a violation can lead to civil, administrative and even criminal liability.


Engineering firms typically carry professional liability insurance, which generally provides coverage against claims of negligent acts, errors, or omissions in the rendering of or failure to render professional services (including engineering), but is often subject to the following notable exceptions:

  • To be covered, there must be a “Claim” which must be both made and reported during the policy period.
  • A “Claim” is often defined as a written demand for damages or for correction of the professional services.
    • Thus, it is imperative that you immediately report any circumstances which could even potentially give rise to liability to your insurer.
  • The policy typically only covers negligent acts, errors, or omissions.
    • Intentional acts, errors or omissions are not covered.
    • Gross negligence is arguably covered.
  • The policy typically does not cover any fraudulent, criminal, dishonest, intentionally or knowingly wrongful, or malicious act, error, or omission, or those of an inherently harmful nature.
  • The policy typically does not cover taxes, criminal fines, criminal penalties, or liability for liquidated damages.

Thus, it may be that the professional liability insurance available to an engineering firm and its employees will not cover or even defend investigations by a state licensing entity for violations or alleged violations of applicable licensing law.

Kean Miller’s insurance group can analyze your insurance policy to determine whether it covers investigations by state licensing authorities and, if necessary, assist you or your broker in procuring insurance to cover those investigations.


[1] For additional resources on these topics see:

Aspen Publishers, State-By-State Guide to Arch. Eng. And Cont. Licensing (available on Westlaw);

Paul M. Lurie, Hugh Anderson, The Practice of Architecture and Engineering by Limited Liability Entities Across State Lines, 24-WTR Construction Law. 24 (2004);

50-State Survey of Firm Licensure Requirements for Architectural and Engineering Firms – 1st ed. Jan. 2015