Company Shutting Down - Insurance question 1

[CANeng11]

I'm really having a hard time figuring out who to talk to about questions regarding liability insurance. Should I be talking with a lawyer, my provincial association, Engineer's Canada? I currently work for a consulting engineering firm in Canada, and the company is closing down at the end of the year. Now I'm wondering if I need to get my own liability insurance. I'm currently covered under the company's insurance, but once they are out of business what happens? I'm not sure if they will have tailing insurance (is this legally required by them?), but even if they do, I've heard that it only covers for a period of 7 years maximum. So what happens after that 7 years or if they don't ever get the tailing insurance? Could I potentially be sued personally?

 

[cvg]

my experience (in the US) is yes, you should get an opinion from either an insurance company or an attorney or both

 

[Ron]

You were indemnified by your company for all of your activities under their practice. Typically that covers everything; however, you might want to get a legal opinion.

 

[Ron]

Also....check your statutes of limitations and statutes of repose if those apply in Canada. If your coverage is shorter than the statute of repose, you might have an issue. If not, no big deal.

 

[phamENG]

...IF you were indemnified. It's not always guaranteed that you've been indemnified by your employer. Make sure it's in writing somewhere official.

So if you were, then you'd need a legal opinion to see if it's transferable. If the company indemnified you but the company no longer exists, does the indemnification hold? And then, even if it holds, will they (or can they) willingly honor it? If they don't, you'd have to shell out the cash to not only defend yourself in the initial suit, but also to sue whomever is supposedly indemnifying you to force them to comply. And then if they're broke anyway, you may be up a creek. Definitely talk to a lawyer...

 

[glass99]

I think a better question would be "has anyone ever heard of an employee of a firm which shut down being personally sued?". I have not. It seems like a pretty remote risk.

 

[cvg]

"has anyone ever heard of an employee of a firm which shut down being personally sued?"

yes I have

you'd have to shell out the cash to not only defend yourself

this was also true

 

[glass99]

@cvg: interesting. What were the circumstances of the ex-employee being sued?

 

[cvg]

cant give too many details
[ul]
[li]HOA sued developer[/li]
[li]the complaint named every engineer that showed up in the project files, and their spouses and all were served[/li]
[li]current employer said good luck, here is a list of good attorneys you could call[/li]
[li]case was settled out of court[/li]
[li]had to pay the attorneys fees[/li]
[/ul]

 

[glass99]

@cvg. God, that sounds like a cartoon version of a condo. Had the engineering firm which employed the engineers gone out of business?

 

[cvg]

it was single family homes development on a golf course
and yes, the previous company was out of business

 

[glass99]

@cvg: if you take an otherwise balanced and intelligent person and put them on an HOA board with a lawyer they become complete sociopaths. What was the nature of the alleged technical issue?

@CANeng11: in the US having Professional Liability coverage at the time of the incident and continuous coverage until the time of the claim is a whole thing. Meaning that even if you get insurance it may not be any good. I think the min cost is something like $3k/yr for an individual for Prof Liability

 

[RRiver]

I can only speak for the US but is the company you work for incorporated? Were you hired or was the company hired and you did the work. If you just did the work innocently handed to you it would be hard to come after you directly unless some kind of fraud or malice on your part can be proved.

I went through something similar while I was writing for a trade journal part time. I wrote an article highlighting how some small errors made by a company became big problems. They came after the journal and myself for basically hurting their reputation. They lost because it was all true but I was never personally at risk.

 

[phamENG]

RRiver - a little different here, I think. In your writing, you weren't acting as a licensed professional engineer. Again, this is the US, but a licensed professional engineer can be subject to being personally sued despite working for an employer. If they aren't the engineer of record it makes it easier to have the case dismissed, but it's not a guarantee. A professional corporation protects licensed individuals from malpractice by their colleagues, but you can still be held liable for what you do personally (or what the court decides you didn't do but should have).

Most good and reputable employers will protect their employees. In the case of insufficent funds (which can happen in a small company with inadequate insurance) or in a company that has closed (and, again, lacks adequate coverage), you can be in trouble.

 

[IRstuff]

Libel is pretty different than malpractice, though.

Doctors are personally liable, at least, in California; that means that LLCs cannot protect doctors from being sued personally.

TTFN (ta ta for now)
I can do absolutely anything. I'm an expert!

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[RRiver]

Yes. I am not a PE so not something I've had to deal with. I can't even say if the engineers at that company were PE's or not? I admit I didn't make myself clear with just saying "similar." I wrote about something I was asked to write about, editors approved and I still got dragged in to it anyway.

EDIT: The OP does not identify themself to be a PE.

 

[Rabbit12]

RRiver, you're right he doesn't specifically call himself that, but it's pretty much implied that he's in responsible charge or projects. If I was an EIT and in his shoes I wouldn't worry. Plop the PE behind my name and it becomes a potential issue.