Professional Liability Insurance

[Rye1]

I scrolled down the list until I found the last time this was discussed but the thread was closed so I started a new one.

Has the recent economic downturn effected anyone elses insurance? My insurance is up in January so I've been shopping around. The American Society of Civil Engineers always has adds advertising that you can get a better price by using ASCE. I submit for a quote and the underwriter has declined to quote on a policy because I work with builders and developers. I write back, "I'M A CIVIL ENGINEER - OF COURSE I WORK WITH BUILDERS AND DEVELOPERS." I believe it has to do with the economy. I had insurance last year, I've never been late on a payment and I've never been sued.

 

[cedarbluffranch]

Too funny!

 

[cedarbluffranch]

The only good benefit to the economic situation is many people who needed liability insurance might not need it this year because either:

1) They no longer have work to do
2) They're broke. Empty pockets = not good lawsuit target.

(I'm being funny of course.)

 

[msquared48]

You are being funny, but also realistic and practical.

Mike McCann
MMC Engineering

 

[MiketheEngineer]

Try Zurich

 

[PEinc]

Try XL Environmental.

I'm not so sure that Rye1's underwriter is as much worried about builders and developers as he is about the types of projects Rye1 works on for the builders and developers. For instance, condominium projects raise a red flag immediately with the insurance companies.

You should be able to get a better insurance deal from an insurance company than you get from ASCE. I did and so did an associate of mine.

 

[bvanhiel]

We quoted prof liability last January. We quoted it again in November. The lowest price was 3X the earlier quote. In our agents words,"they can't make money in the stock market, so they have to make it from premiums."

 

[DonPhillips]

I carry XL and my premium dropped around 40%. Probably has more to do with my strong history and my ability to get over 90% of my billings in a written contract with a limit of liability clause.


Don Phillips

http://worthingtonengineering.com

 

[cry22]

Don,
Can you share you liability clause that your are getting away with? can it really stand in court in case of negligence - say the stucture you desined collapsed and injured someone? does the liability void your seal and signature?

And last but not least: can you share you insurer underwriter name since your rates have dropped 40%? a lot of us would be interested in paying 40% less and you probably ought to check for referral bonuses.

Thanks

 

[DonPhillips]

Here is the paragraph I use:

"To the fullest extent permitted by law, Owner and Engineer (1) waive against each other, and the other’s employees, officers, directors, agents, insurers, partners, and consultants, any and all claims for or entitlement to special, incidental, indirect, or consequential damages arising out of, resulting from, or in any way related to the Project, and (2) agree that Engineer’s total liability to Owner under this Agreement shall be limited to $50,000 or the total amount of compensation received by Engineer, whichever is greater."

I understand this covers negligence, but a court could award a value higher than this for gross negligence. Keep in mind, this is for small projects, using the EJCDC short form agreement. A larger project would probably have a higher limit, but I have not crossed that bridge yet. the intent is to get the exposure more in line with the compensation. I use it for contracts with homeowners more than anything.

My E&O underwriter is XL, are you asking about my broker? I use a firm out of Cleveland:

http://www.stassociates.net/

ENR magazine was predicting a softer insurance market for 2009 plus my firm extra year of coverage combined to help me with the 40% drop. It certainly surprised me when I got my renewal notice a couple of weeks ago.

I hope that helps.






Don Phillips

http://worthingtonengineering.com

 

[lansford]

One issue that my be relevant is that you current insurer covers the previous years that you had this insurance, while a new insurer may only cover the period in which he provided it.
JIM

 

[DonPhillips]

From what I understand, E&O is typically claims based and not occurance based. A claim must be filed while the policy is in force. I just renewed a contract where I must maintain E&O for one year past the contract termination.

General liability, on the other hand, is occuranced based and a claim can be filed after the policy has lapsed for an event that occurred during the policy period.


Don Phillips

http://worthingtonengineering.com

 

[manofstl]

I've had PLI for 3 years, no claims. Given lack of work, I doubt I will renew PLI for 2009.

I attended a course on Engineer's Liability. The lawyer teaching the course says statistics in SC show engineers with PLI are sued 5-8 times more frequently than engineers who go bare. Lawyers consider small engineers with no PLI as not worth the trouble.

 

[MacGyverS2000]

The lawyer teaching the course says statistics in SC show engineers with PLI are sued 5-8 times more frequently than engineers who go bare. Lawyers consider small engineers with no PLI as not worth the trouble.

While I agree with your last statement, those numbers may still be somewhat misleading. One could argue that engineers with PLI are taking on more litigious projects than their non-PLI brethren, leading to more lawsuits.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[cedarbluffranch]

I've read through this thread but have to admit that I'm confused regarding the personal liability and the protection it provides.

I understand (please correct me if I'm wrong) that contracts can only limit liability to the people who are part of the contract. So I design an antenna tower installation, and it falls on the person who hired me to design it, my liability may be limited based on the contract I signed. But if it falls on the neighbor, my contract hasn't limited the liability and hence liability insurance, right?

But then I understand that errors and omissions insurance protects only for however long the policy is in force. So does this mean I need the insurance for a lifetime? Say I carry the insurance for three years and don't for the 4th (as a previous poster suggested). Then a big wind storm hits the antenna tower and knocks it over on a neighbor. I believe I'd be bare, right? But I don't want to carry insurance for the rest of my life, especially if there are a number of years that I'm not doing consulting.

Thanks for your information!

 

[DonPhillips]

You can get, what I think is called "a tail policy" to cover your current liabilities into the future. You can ask your broker about it. If you were practicing like 20 or 30 years and wanted piece of mind in retirement, it may be worth purchasing this sort of coverage.

Don Phillips

http://worthingtonengineering.com

 

[Richard63]

I've had General liability for two years for less than $300 per year. Now its up for renewal and my agent says they cannot get general liability for me unless I also buy professional liability for several thousand dollars. I've told them that I do not want professional liability, but they say the underwriters will not sell me general liability unless I also buy Professional.

I design and sometimes design and build machinery for manufacturing.

I'm shopping around and getting similar responses.