E+O insurance for overseas projects

[glass99]

What kind of E+O insurance do people carry for overeseas projects? I have just been told by my insurance broker that most E+O policies do cover overseas projects but only for litigation which is carried out in the US. If I am sued in a Dubai court it would not cover me.

 

[zdas04]

That is what I've found as well. I'm just not insured on overseas projects.

Make sure that when you report gross receipts to your U.S. insurance provider that you exclude all overseas income since it is not covered. I got audited by my provider one year (overseas income was over 98% of total that year). It was a great year and they were going to raise my rates significantly (from about $8k to over $25k). I took my agent to lunch to talk about options. I mentioned that my Australian client was slow to pay and he sat right up and started quizzing me about where I was working. Once he understood, he said that we only need to report U.S. income (i.e., covered projects) on the audit and instead of the rate going up to $25k it should go to $3k. He apologized for not catching that in the two previous years, but there was no way to get refunds for those years.

[bold]David Simpson, PE[/bold]
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[glass99]

Zdas: Man alive, I would rather be covered and pay the $25k.

So what do you do to cover yourself as a practical matter? Do you write in your contracts that its in accordance with US / New Mexico law ? Can you get supplemental insurance for overseas work? Do you just assume its hard for them to sue you overseas?

 

[zdas04]

It is not a covered/not covered thing. It is a "No insurance company in the world will provide E&O insurance across international boundaries" thing. It is very hard to sue someone from another country. U.S. courts do not have jurisdiction and civil cases are not extraditable. If I get sued in South Africa (or Columbia, or Australia, or Indonesia, or Romania, etc) then I just won't ever go back to that country. There is not much other option that I've been able to find in 15 years of doing this.

[bold]David Simpson, PE[/bold]
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[glass99]

I just looked up my policy from last year from One Beacon (which is not longer offering coverage for engineers): They say that they cover your settlement and loss overseas but you have to arrange for your own defense.

 

[zdas04]

I looked at a half dozen policies that had been proposed to me over the years and none of them have that language or anything like it. I wonder what question you asked the agent (that I obviously failed to ask) that got you a policy with coverage outside the U.S.? I also wonder what the premium was for that policy?

[bold]David Simpson, PE[/bold]
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[glass99]

The premium for this Beacon policy was $14k for my two man practice.

As I am looking into it some more, the carrier Admiral seems to offer similar terms in respect to territory.

You are in a little different business - I am in the Architects and Engineers space (i.e. construction) and you are in maybe mining or something. I know that carriers get very exercised about which "market" it is because its so regulated.

My broker is Pearl if you want to talk to them.

http://www.pearlinsurance.com.

They are quite good in general though I have to say they don't seem super knowledgeable on this topic. I assume this is not something most small practices ask about.