E & O Question

You will probably get blasted for your question. Were it me, I would pass on that project even in these hard times.
jud

> ...Is there such a thing as a site or project specific coverage?

No, not from what I've discovered.

Also, if you ever do get E/O insurance and then decide to not carry it anymore, you will discover that anything you worked on whilst carrying said insurance is no longer covered.

Example. You get E/O for your project which lasts 2 yrs. After 4 yrs you don't want the insurance anymore, so you drop it. What happens is that the project (including yourself/company) is no longer covered either.

I can't remember the term they use, but its along the line of "liability terms" and not on "time limit terms". If your error is discovered after your coverage was not maintained, you are no longer covered.

no blasting from me. i carry it but there are plenty of folks around here that don't. to my knowledge you can not get coverage on a per job basis. but i think you can get the coverage and then drop when you don't need it and get a refund on your overpaid premiums.

We used to carry it when we were doing alot of construction ect. and we could ballon it for a specific project. meaning if a project required more than we carried we could up the coverage for a specific amount of time, this is in essence for "one" project.

My insurance guy told me that I cannot get it on a project basis. It is for the year. Also, if I drop it, I can pay a fee (I think 40% of the annual premium) to continually cover anything that was done during the period of coverage. Some kind of buy out clause. It is relatively inexpensive once you have it for a while. My rates seem to drop every year.

We have a couple of clients that require we carry coverage. I found a great place where the premiums are reasonable, around $1,600/yr...

I do very little construction layout, mostly pre-design topo and boundaries, and GPS control.

I recommend that you check around for prices, and keep checking. It's worth having, compliments your business, and protects your clients!

The NSPS recommended providers is where we found our policy provider.

Mr. Griffin has it right.

Think of Professional Liability Insurance like Health Insurance. If you used to have health insurance back in 2005 and you break a leg in 2012, you wouldn't expect the insurance you used to have to cover that break.

One additional thing is very important to note. Carefully read your contract. Most that require PL Ins. also require that you continue coverage for a time period after you finish the work.

If you drop the coverage as soon as the project is over, you can get a call from the client demanding their money back. This is because most of these contracts have a clause requiring the Insurance Carrier to notify them if you drop coverage.

I hope you found out all this stuff before you priced the work.

Larry P

Thanks guys. I have worked for this client for over 15 years and this is the first time they have required it. So no, it wasn't in the first scope of work that I priced it off of, it was in the final contract to be signed before starting work Monday. I learned- or rather re-learned about the continuing coverage for years afterward and all that. I will check into it as we are entering a different phase of work. The corps work we were doing didn't require it but we might need it to move forward. Thanks

E & O Question - HIJACKED

To hijack the thread:
Don’t we think the public thinks professionals carry E&O?
Would we expect the professionals we hire (Engineers, Attorneys and MDs) to carry E&O?
Do we owe the service and protection to our client, our employees, our estate?
Just asking.

E & O Question - HIJACKED

"Do we owe the service and protection to our client, our employees, our estate?"

Yes, in my opinion. As a Professional we owe our clients that protection. It's part of being a PLS ...

E & O Question - HIJACKED

:good:

Pretty nominal fee, I wouldn't leave home with out it.

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OK, I'll bite. I have had one client for 20 plus years and recently had a 5 year contract with the Corps of Engineers neither of which in their very detailed and specific contract specifications required it. If you were in my shoes, you would have payed thousands of dollars a year for insurance that your client didn't require? Look down your "professional" noses at me if you like, guys, but I only carry what my clients require. Now one of my clients is requiring E&O and I'm looking into it. Besides that, I have heard stories that carrying E&O increases your chances of being sued. Urban myth? Happens?

E & O Question - HIJACKED

Oh, and Jud, you are a prophet. 😉

I have it. Listen to Larry P. and be careful how it works. I can tell you that many of my clients require it. The bad thing is they seem to increase the amount they want covered. One year you need 1 million and the next year they want 4. Then you have to decide if it's worth it. I've dropped clients because of it (they weren't all that big for me anyway). I also had a client that paid the premiums because they needed help so bad. I don't think those days are coming back anytime soon.

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You might think that all need that insurance and having it creates less risk to the client. Don't believe that and in some cases that insurance is why shortcuts are taken, little risk when the insurance has us covered. I believe in doing good work, and not feeding the insurance bottom feeders who use insurance as a source of predatory income. If the insurance money was not available, lawsuits would more often result in greater justice and less cost. Insurance of all kinds has provided a source of unlimited income to many, those people need to be placed in a job that actually generates wealth from the production of goods or food higher than the cost of caring for them. Like government, insurance can grow beyond its original intent and usefulness then cause the destruction of the very thing that provided the need in the first place.
jud

E & O Question - HIJACKED

> ... I have heard stories that carrying E&O increases your chances of being sued. Urban myth? Happens?

I heard the same myth many years ago. Personally, I believe it...lawyers feeding lawyers feeding lawyers.

One of those lawyers also went on to explain to me that there is not a judge on the planet that would ruin a mans livelyhood, AKA take his house, all his money, and all valuables - in the event of an error. Licensure maybe, but not his life.

However, when the insurance company is happy... then life goes on as the lawyers feed the lawyers with some scraps for the other lawyer to pass on to his victimized client. Meanwhile the licensee is still flapping in the wind.

I bought a catch basin once. And helped a guy move a fence. Oh, and that curb they had to R & R. And those gosh darn typo's & fat fingered calc's.... pocket up or make it right. Does E/O really prevent that stuff? No, and it never will.

E & O Question - HIJACKED

> I bought a catch basin once. And helped a guy move a fence. Oh, and that curb they had to R & R. ......

That's a lot of costly mistakes. I can honestly say in 30 years of practice I haven't had a one that cost me, my company, or my insurer any money. Knock on wood.

I know a surveyor who is paying a $4k/year flood insurance policy on a house he did a flood cert for. He made a 10' bust in his level run and never closed his loop back to know he had made the error. It only showed up when a later owner did an addition and hired a different surveyor to do the cert.

Guy didn't have E&O so the 30-year policy was a negotiated settlement out of his pocket. He chose that over going to court and standing to lose his business and home.

Me, I haven't had that worry. I carry E&O and have for many years. Its a minor cost and I sleep well at night.

E & O Question - HIJACKED

Alan, I do not purchase E&O insurance for my clients, I buy it for ME.

E & O Question - HIJACKED

Target, you buy it for the client so you don't have to pay if there is a claim. You are providing your client with a source of funds if something goes wrong. You don't collect a dime. It does not protect your license either.
jud