Professional Liability and Business License required for few side jobs per year? 1

[geoman77]

I'm leaving my job soon to begin a PhD and will have the opportunity to do some small geotech design jobs on the side for a contractor I used to work for-- mostly ground anchor design and observing load tests on anchors. The total revenue from the work will almost certainly be less than $15k per year, maybe even less than $5k. Any thoughts on professional liability insurance? The contractor doesn't have any engineers in-house so they don't have E&O insurance, but I could probably use their general liability policy to cover myself. I don't like the idea of not having PI insurance with my stamp floating out there, but looking around it sounds like the minimum possible fee is several thousand dollars per year, which I could never afford to shell out in one chunk. Anybody out there in a similar position?

Also, do I need to get a business license to do this sort of thing? LLC or similar?

 

[stanier]

Could you work through an intermediary that does have insurance?

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[beej67]

You will probably need a business license, (check local regs) and their general liability is not going to cover you for E&O. You may need to register your company with the state licensing board as well, even though you are already personally registered.

If you were anything but geotech I might say to just do it as a sole proprietor and don't carry E&O at all, to make yourself less of a lawsuit target, but geotechs are the sort of folks that get sued more than average in my experience. I would say LLC, E&O policy, skip the general liability policy. Go for minimum coverage (250k?) on the E&O and you'll probably be paying around 3k/yr, and another 1kish for licensing and other crap.

I would not do it if you only expected to make 5k/yr. 15k might be worth it. You could probably squeeze 25k to 30k worth of fees into your PhD schedule, if you can get the work.

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[MiketheEngineer]

Hate to say this because you probably like the guy -- but for $5,000 or maybe even $15,000 - it is probably just not worth it. You will spend all (most) your money on licenses and insurance....

 

[77JQX]

I like Stanier's idea - that's how I've done it in the past.

 

[bimr]

First off, if you are not comfortable enough with your skill set to do the work, then you should not be doing the work.

In addition, you may pick and choose the work that you desire to do. You don't have accept all proposed work. You are now a subcontractor and should be looking out for yourself.

 

[stanier]

One client I had was very inventive. He gave me a contract to supply stationery but it was really for an engineering exercise. I dropped a report & model on his desk and he paid my invoice for the stationery. His masters never knew, he got the information he wanted and the matter was resolved.

"Sharing knowledge is the way to immortality"
His Holiness the Dalai Lama.

http://waterhammer.hopout.com.au/

 

[MiketheEngineer]

That was ethical and a court would see right through that!!!

 

[rowingengineer]

agree with mike, at 15,000 it wouldn't stack-up. Either increase your work load to get the figure to about 50,000 and pay the insurance or don't do the work and sleep easy without the insurance.

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[jgailla]

Keep in mind also that an LLC or other corporation will not protect your personal assets if you are working as a P.E.
P.E.s can and will be sued separately from any corporation.

 

[bimr]

jgailla,

Good point. In addition, I would add that you can also lose your license for unethical deeds.

 

[stanier]

Do as the lawyers do. Put all your assets in your name. Start a company where she is the director. If the sh*t hits the fan rely on vicarious liability and let the her/comapny go bankrupt. You still lose your licence but not the family home.

"Sharing knowledge is the way to immortality"
His Holiness the Dalai Lama.

http://waterhammer.hopout.com.au/

 

[fattdad]

incorporate, don't get professional liability and use poverty as your defense if there's a problem.

Isn't this post somewhere else on the forum?

f-d

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