I'm licensed but the company I work for doesn't carry design liability insurance

[tstructural]

I'm a licensed PE - Civil with all of my job experience being in structural design. I recently started working for a large mechanical equipment manufacturing firm. We do have some need for structural engineering services and typically hire local SE firms to provide the design and then of course the stamp and insurance. For the most part I funnel information between our mechanical design and SE firm. But, every now and again I'm asked for my structural design opinion. I'm comfortable explaining that yes we do design per ASCE 7-10, no stainless steel doesn't have the same yield limits as cold formed steel and can't be considered an equivalent, etc. - Hopefully I'm correct in that I can give this advice without needing insurance.

Here's my big question. Since I have no Engineering Design Liability Insurance and the company doesn't carry that type of insurance - although they of course do have manufacturing liability insurance - can I perform structural design work for our designs. And then, when requested, can I provide a letter with my stamp that reads something to the affect of "our current construction is sufficient for pipe loads as defined by the pipe design engineer calc package........" - you get the point?

I was told that even with a valid license you can't stamp without carrying liability insurance specific to Engineering Design work.

On one hand I think it's great that this company at least cares enough to hire a structural engineer. The past 15 years of my experience has been as SEOR and I can tell you I've seen so many attempts from manufacturers to have something designed once 20 years ago and they just keep photo copying the calcs and expect that everything is all good. On the other hand - I'm not willing to lose my license for any company.

 

[Ron]

T-... Not sure where you are located but have never heard of an insurance requirement for signing/sealing a design. Good idea? Absolutely! Required? No....you can take the risk if you want.

I would get my employer to indemnify me for any design claims. Further, if you are in the U.S. And provide engineering that ultimately is in the public realm your company should have a Certificate of Authorization or similar to provide engineering services.

 

[TehMightyEngineer]

I think this might be one of those times when a brief talk with a lawyer or insurance liability specialist is the best course of action.

Maine Professional and Structural Engineer.

http://www.fepc.us

 

[tstructural]

Thanks for you input. I think I should talk with an attorney but I want one that understands the Professional Engineer licensing. I tried googling and couldn't find an attorney that advertises that type of experience. I'm horrible at googling.

Any thoughts on how I might find one in my area - Oregon.

 

[IRstuff]

In Oregon, it looks like a company is exempt for actually requiring licensed engineers to do engineering within the company, unless there's a possibility of injury to employees or visitors.

https://www.oregonlegislature.gov/bills_laws/lawsstatutes/2013ors672.html

http://licenseinfo.oregon.gov/?fuseaction=license_seng&link_item_id=13962

shows no requirement for insurance, but that's risky for you.

TTFN
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[Canuck67]

First thing I would recommend is to obtain a quotation from your existing insurer to have the existing policy expanded to include your engineering design and liability. You mention that you work for a large firm, so I can't imagine they would not be able to absorb the cost of the policy with one, or a few, engineers on staff. If the cost is too high, or the company unwilling to pay for the additional insurance, then I think your decision is pretty clear in that you should outsource all the engineering.

Once the insurance question is resolved, you will need to contact your state board to determine the regulatory requirements, and as others have pointed out, speak with a lawyer to ensure your liability is protected by your employer.

 

[IRstuff]

I thought the OP stated that their company doesn't carry any such insurance.

TTFN
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[JAE]

I had a good friend of mine who is a structural engineer (licensed) who historically was a design engineer for a large A/E company. He was a design engineer for a large multi-storied (40+) building.

At some point in his career he jumped over to work for a steel erection contractor but while with them could never do any structural design or seal/sign any letters or drawings as a licensed engineer due to the fact that his company didn't have any professional liability insurance and they didn't want to take the risk. (Ron, above, is correct that the choice over sealing something is yours - not a legal restriction based on insurance).

I think a couple of actions on your part would be helpful:
1. Have your employer write a letter confirming that as a part of your employment they will hold you harmless against all claims of liability arising out of your actions when those claims are directed at you personally as an engineer or based on your engineering. Have your own lawyer review this letter (or recommend a better method) of setting up this protection.
2. Refuse to sign or seal anything as a licensed engineer for any company work unless they procure professional liability insurance.

Note that there is nothing you can do to avoid an engineering board from suspending your license should they determine that you acted outside the bounds of good engineering practice. Insurance doesn't protect your license - only the financial risks from lawsuits and claims.

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[tstructural]

Update to my OP -

Thanks everyone for your advice. I did hire an attorney and wow - I do see the world through my ethical engineering glasses. My attorney described all of the ways that I can be sued and sufficiently scared me into sticking to my guns and requiring the company provide E & O insurance and also indemnification for the deductible on that insurance.

The company just made an offer for permanent employment so we'll be discussing/negotiating pay and benefits but no negotiating on the insurance.

 

[darthsoilsguy2]

I would think carrying insurance would be more of a specific Contract requirement depending on the T&Cs of your contracts. If there are insurance requirements of the contracts, it will get awkward with the Client asks for the COI "Certificate of Insurance" with themselves named as an additional insured.

I worked for an engineering company in the Top 50 of ENR's list. That company was "self-insured" for professional liability. I didn't pay much attention to details, but i would suspect there probably was an escrow acct set up to avoid contracting issues. I was only aware of the Self-Insured status because mgmt told us, all the time, all the time, all the time LOL!

 

[IRstuff]

Self-insured for these types of companies seems a little scary to me. Insurance works because the risk pool is large, which is why premiums can be low. A self-insured company is a risk pool of ONE. That means that unless the company is gigantic and they pay premiums to themselves on each and every job, a single suit could cripple the company financially.

TTFN
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