PE liability

[Atomic25]

2 questions:
If you're a PE who knows you're going to be leaving a company in a year to go back to school, and the company doesn't know it, how would you approach sealing drawings for the remainder of time at the company?

How does the liability flow after you leave the company and are in school? The way I see it, if there was an E&O claim the company would assume the liability. Only if something were big enough that they had to go to court would you be summoned....and at that point they'd have to pay you to go to court. Correct?

 

[IRstuff]

Don't know about PE insurance, but doctors usually have something called "tail" coverage, which may, or may not, be covered by the last employer.

TTFN

FAQ731-376

 

[msquared48]

You would have to check with the insurer. Some only cover any claims filed for the duration you pay to have coverage. Best to ask.

Mike McCann
McCann Engineering

 

[Atomic25]

I'm not sure I understand those replies. Some PE's switch jobs all the time. When a claim comes up after you've left, how do firms handle the liability? As I understand it, since the drawings are the product of the firm, it's the firms financial liability unless there is a specific code problem in which the PE can go to jail.

 

[msquared48]

If you are approaching it from that aspect, even when I got my PE, I did not stamp any calculations or drawings of the firm, only the partners did. Hence there was no liability if personnel other than the parthers left the firm. They assumed it all.

If you have stamped plans and are not a partner, that is another issue. Again, you might want to check with the insurer of the firm you were employed with.

Mike McCann
McCann Engineering

 

[zdas04]

Who's E&O insurance is it? If it is the firm's and they have you as an additional insured on one big policy, then you leaving probably does not have any impact on coverage. If it is a specific policy that just covers you (either they pay or you pay) then someone (probably the firm, but I'd talk to a lawyer) should purchase a "tail" policy to continue coverage of the period from the statute of limitations (3 years in NM) through your leaving. This tail policy will only have to be maintained for the statute period (i.e., until 3 years after you left the company in NM).

I had a course in B&PL insurance last week and it was really an eye opener. Every policy has an inception date (generally the date you first bound coverage with a particular insurance company) and an end date (the date that the current policy expires). Each year you stay with a company the number of years that is covered increases by one. As soon as you change companies, the new inception date becomes the date you changed and you are self-insured from the date of the new policy back to the statute of limitations. This was really news to me and something to consider carefully before changing carriers.

David

 

[IRstuff]

Thanks, David. That sounds almost identical to the way doctors are insured.

TTFN

FAQ731-376

 

[Atomic25]

Man, I see where you guys are going with this, but my question isn't getting answered. Yes, the firm has a blanket policy that covers all professional engineers in the company and there's some loose wording that it may cover past employees. But how often are past employees drug into claims? Typically the firm gets sued, not the individual. Me leaving wouldn't have any affect on them. Talking to the firm's insurer would likely get me fired.

HOW DOES THE LIABILITY FLOW AFTER LEAVING A COMPANY??

IF I GO BACK TO SCHOOL DO I NEED TO BE CAUTIOUS AND PURCHASE A PERSONAL LIABILITY PLAN?

 

[dcasto]

Your employeer provided the work, not you. If there is a problem then your employee is liable. The exceptions would be negligence or fraud. If you lied, cheated or stoled, then its on you and no insurance policy is going to cover those acts.

E&O is errors and emissions. Your employeer may or may not have it, but in any case they can not make you pay for something you worked.

The good news is, if there is a problem and they call you to clarify something that you worked on, the minute is free, after that insist that they pay you to help them sort out the problem. If its litigation, then you can double what you were being paid before you went back to school.

Since this is an ethics fourm, you will need to ask your own lawyer for legal opions in your state, country, or where ever. Missing a number or specification is an error, but changing a number to make the cost go down or increase a bonus is willfull misconduct. Relax, go to school, you still have a life after work.

 

[Ashereng]

Okay. Let me try also.

If you stamped a design, you are liable/responsible for it. For how long are your responsible? (I think is what you are asking.) The answer is, you are responsible for it until the statue of limitation runs out. How long is that? It depends on what it is, what happened, and which jurisdication the project is under.

Or, are you asking, "What are the chances that you will be dragged into a lawsuit?" If it is your stamp, I would think the answere is "It is possible." Since you don't have a lot of money, chances are, they won't go after you first - they will just include you because it is your stamp.

With regards to insurance, that depends on the policy. There are a lot of variances and types to go through.

Will they pay you to go to court? Are you kidding? Who is going to pay you? The people suing you won't be paying you. Your old company won't be paying you - you are no longer an employee (they may actually also be suing you to recover part of the damages, since it was your stamp). And I can't see your insurer paying you either (and they may be trying to find grounds to void the insurance on the grounds that you did something illegal or willfully wrong - eg. fraud).

Oh, one other thing. Most of the PEs, that I know, that stamp things, usually carry their own E&O insurance, for the particular situation you are asking about.

"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

 

[dcasto]

I guess I better send my checks back to my old employeer I recieved.

 

[Ashereng]

dcasto,

I would think that you were helping defend your employer, because you were not in error?

What would happen if the error was yours?

"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

 

[dcasto]

The items in question came down to interpertation, mine and the other party. It's back to the poof of negligence.

If the OP has stamped stuff he thinks might be construded as negligent, its to late to get insurance, gotta pray and wait for stutute of limitations (which dosen't exist in fraud) or raise a flag and correct things before he leaves.

Without trying to be rude; If you think you are going to make an error before you leave, best leave now and improve your education as a way to increase you belief in yourself. Also, what about stuff you stamped before today, why worry about the next few weeks or months?

 

[RARWOOD]

My understanding is that if you seal a set of plans you have a professional liability for those plans until the statue of limitations runs out. As indicated above the statue of limitations varies from state to state. It is also my understanding in some states there is no statue of limitations on engineering designs.

Regarding a future lawsuit, it is unlikely that you would get paid since you would probably be named in the suit. The first thing you should have done, once your current firm asked you to seal drawings, was to find out what their E & O insurance covered.

It was my understanding, at the only firm I sealed drawings, that the firms E & O insurance would cover any legal fees I incurred in the future defending myself from a law suit filed regarding design work I sealed while with the firm.

 

[Atomic25]

No, haven't stamped anything negligent. I just realize you can be the best engineer out there and still have anything come back and try to bite you....like a steel fabricator underestimating a job, filing chapter 11 at the close of the project, and then their bonding agency coming after you two years down the road with outrageous claims, bringing you into six months worth of arbitration, and at the end of the day they get $0 but you're stuck with a bunch of wasted time and a hefty legal fee you cant get back.