Length of Professional Liability After Retirement

[CBSE]

I started my own business a couple of years ago and hadn't really put much thought into what happens when I decide I no longer want to work.

According the model statute of repose statute, we are not liable to defend ourselves for a project after the project is greater than 7 years old...simply put.

When I retire...which is a long, long ways away, what happens to me and my insurance? Do I need to carry insurance for another 7+ years even if I'm not practicing?

 

[msquared48]

Yes, but not if you're dead. Talk to your insurance company.

Mike McCann
MMC Engineering

 

[VoyageofDiscovery]

I don't think your assumption of 7 years is correct. That may be an accounting or IRS statute. Here in Canada, in one province it's 30 years after discovery of an error or omission. A company I once worked for mentioned to all their engineers that they would cover E&O for all engineering work we carried out under their banner even after we have left. Nice to see companies taking pride in their work and their internal processes.

VoD

 

[CELinOttawa]

This differs heavily by jurisdiction and insurance. Talk to your insurer and lawyer.

 

[CBSE]

http://www.acec.org/advocacy/committees/pdf/model_ae_liabilitylaws.pdf

The above is what I'm basing my assumption of 7 years off of. I will talk with my insurance company today. This could be a very large expense after retirement that I hadn't contemplated prior to jumping off the business start-up cliff.

 

[AELLC]

Could a lawyer discuss methods of shielding your assets?

 

[TLHS]

I don't know about in the US, but in Canada you can get non-practicing/retirement professional insurance products specifically aimed to cover you for your professional liability once you're no longer actively working.

 

[oldestguy]

No one wants to pay insurance premiums for the rest of their life. In my case I had an attorney knowledgeable in finances prepare things. When first working for myself, I transferred everything except a computer and a truck to the wife. All contracts and invoices had this situation printed on the backs. Also, a statement was included saying that if there would be a claim against me, in accepting the contract or the work (even if no payment), they agreed not to attach wife's assets. All of this was made known up front, just in case. Even with insurance, that statement contract was used and the only claim I had never went to attaching wife's assets. Insurance covered all. Most of this asset split situation still is present, even though no work under my own name is being done at age 85. Of course the wife had better be one that won't run off with everything. If one is in a state with estate taxes that would affect total assets, trusts and other work in needed to minimize those taxes.

 

[CBSE]

oldestguy: that is pretty good advice and I have actually contemplated it. The language in my contracts states that an entity shall not pursue personal property, only property owned by said business. I guess I will need to have an attorney review it. I'm doing work for one right now so that might be an easy trade off

 

[XR250]

I believe it depends on the statute of repose in your particular region. In NC, it is 6 years after substantial project completion. I also believe in NC, they cannot touch any asset that is jointly owned as long as the wife did not participate in the business.