Help!!! Insurance being cut!!! 2

[klipper]

Hello All,
I have a situation here that I am hoping that some of you will have some valuable insight into. Here is the back ground: I am a liscenced PE practicing structural engineering for a design build general contractor. I am the sole engineer, draftsperson, basically I am the engineering dept for this small company. We carry E&O insurance for my part of the business. This week I was told that 1)All employees are to take a 5% cut in pay, 2)All employees are to take two week unpaid leave, and 3)The big one for me - they are going to let the E&O insurance run out May 1. My initial comment to them was - well I'm done engineering for you. I can project manage, estimate, etc. but I am not taking the risk for the engineering personally.

Here is the problem - I recently received a PO to do some engineering work for a fabricator to raise a penthouse on an industrial building. Best case scenario is that I finish the calcs/dwgs end of March and the calcs/dwgs would go to the state for approval as well as the local municipality for permitting. Basically I feel that construction would start May 1 or thereabout. I would still be the supervising professional at that time (and thru construction) and the E&O insurance would have run out.

I have come flat out and told my employer that I am not going to finish the job or stamp it if I am not going to be insured through the project, period. I told them that if they wanted to subcontract the engineering out, that would be fine with me. I also told them that I feel obligated to let the customer know what is going on. Ownership in this company is 50/50 (two brothers). One brother is gone until the 24th of this month (March)and they really aren't giving me any direction on this. Meanwhile, my customer is assuming I am hammering away at this project.

What would you do???
1. Continue to engineer as usual, and when May 1 comes around say "I'm done find another engineer of record." (crappy, I think)
2. Continue to engineer as usual until the other owner comes back and, hopefully they decide what they want to do.
3. Sit on it and do nothing until both owners are back and decide what they are going to do?
4. Call my customer and say something is going to happen here, either I am going to leave or they are going to let me go, your deadline is not going to be met and you should probably be looking for another engineer.
5.??
6.???

Thanks in advance for your help/comments.

 

[melone]

Option 2 seems to be the best solution to the problem. There is no use in wasting valuable time worrying about things that you can't control (namely what your bosses will eventually decide). Therefore, you should continue making forward progress on the project, and give your employer a chance to decide.

 

[CajunCenturion]

Definately NOT #4. I wouldn't involve the customer in this.

I agree that #2 at this point seems to the most reasonable course of action. While waiting for the other owner to return, you might want to prepare a risk assessment for them to consider.

 

[COKA]

I agree with #2 as well. However, I think that you should give them (bosses) a deadline to respond, say 2 weeks. Because if you wait too long, both parties will lose, and you might lose credibility. So if you let them (bosses) know that say two weeks after you had a meeting with both brothers, you want to let the customer know what is going on.

To me you sound very upset, which is understandable with all that happened this week, so I have an advice for you: Take some time to think and calm down. The main thing is not to start accusing anybody, and to make sure that the client has as good and honest service as possible in this circumstance. If not, it might turn against you down the road.

Coka

 

[arto]

Can you "Homestead" your house? that way it's protected against lawsuits

 

[BJC]

What would you do???

1. Talk to the insurance company. You may get straight answeres from them. You may be supprized at how little is covered now.
2. Consider an "umbrella policy". I had one for a while for 2 million. IT was not that expensive.
3. The thing about professional libability insurance is how long does it last. IF you win the lottery next week and quit work can you be sued for something you did ten years ago?
4.) The standard answer for this question is "see your lawyer". Depending on where you live and if your married you may be safe. In some states join property is safe (for a long while anyway). Leagle fees at this point may be a wise investment.

 

[RDK]

I might try something along the lines of #4.

While it would not be proper to inform the client of something that is essentially an internal company matter, they should be informed that the work will not be covered by E&O insurance. That might be part of their contract with the owners.

I would also get a written understanding from the company and the owners personally that they will hold you harmless for all engineering work conducted during your employment. While this would not protect you if things really go wrong, it might get them to rethink the cutting of the insurance. If there is no other money than your personal assets left then that’s where the judgement might come from. You would be left with an agreement that could not be enforces against a bankrupt company and its bankrupt owners.

What does your state association say on this? Here in Manitoba we cannot consult without insurance. I am not sure about the situation for design builders. For employee engineers there is a secondary policy held by the association to cover this sort of issues. Your association might have something similar.

As in all legal and insurance matters contact a local professional well versed in these issues.

Finally you might have to consider moving on, polish up your resume.


Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[DRC1]

First, I would keep working on the project, but don't stamp anything. Definetly go see a GOOD A/E attorney. Ask around and find someone good. If it is design -build your work may be covered under the G/L. Are you an employee of the company or "subcontracted labor"?. Don't stamp anything untill you get professionsl advice. One thing to consider, if they are making thes cuts on the design side, what cuts are they making on the build side and how has that effected quality in the final product and are you sure youwant your name on these drawings?

 

[plasgears]

Shop around for a company that will underwrite your insurance needs. A cut in pay might be overcome with good insurance coverage in the new situation.

 

[klipper]

Thanks to all of you who have responded to my post. Your insight has been very helpful. I actually have a job interview set up for tonight and had one yesterday as well. In the meantime, I have decided to carry on with the current project, not stamping anything, but just waiting until both owners are present to decide exactly what we are going to do.

Thanks again all.

 

[ctopher]

I would have found a new job yesterday! Sounds to me that you are good at what you do, and being a PE, you can find a better job anywhere.

 

[jmw]

Just about all the writing is on the wall.

Job interview is the way to go. Jump before everything collapses around you.

For the rest, protect your butt.

Do nothing that will come back and bite you later on.
But, don't go out with a lot of bad feeling.
If you need to stay until you firm up a new job, be polite but clear and explain your position to your existing employers. Work with them to establish what you can and can't do.

They may have a temporary cash flow propblem, they may be going belly up. If they survive and come back strong they may want you back and you may want to go back.

Bottom line, you are more important to you and your family than your employer is.

JMW

http://www.viscoanalyser.com

 

[RDK]

Why don’t you try going out on your own with a contract with the current firm to get you started?

That is a typical way employees become independent suppliers.




Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[MASSEY]

I'd go with number 2 also, and if the bosses don't insure your project perhaps you'll be prepared for RDK's last post with this job as your first project. However this would open a new can of worms, but it may turn out to be the best solution because the customer will get what he needs and your bosses save face by letting the customer be happy.

At the same time I would also look into the jobs that may be offered thru your current new interviews. Maybe this current project will be the first and last in your own independent endeavors.

At any rate #2 seems best for the customer at this point.

 

[pmureiko]

A lot of good responses to your question have been posted. Here are some thoughts I have others can build on or correct.

1) Letting the insurance lapse may be a sign they don't expect to stay in business much longer. As such the owners don't care whether someone sues the bankrupt or closed company. The owners may have already consulted with a lawyer on a strategy that hasn't been shared with you.
2) Lawyers will be after the deep pockets regardless of the status of the company being in business or not, having insurance or not, and whether you work for them or not. If so you would need to protect yourself with appropriate insurance coverage.
3) On engineering ethics, I wonder if they are a company licensed to do engineering work. It seems odd to me that the owners are not licensed engineers. Is there someone knowledagle about these requirements?

 

[jsummerfield]

Do not involve the customer. If you feel that you need errors and omissions insurance then buy it. Get on with your job either with or without E&O insurance. Consider looking for another job if necessary. However, your employer appears to be trying to keep you even though times are bad. Consider being thankful.

John