Professor Ethics 2

[MRM]

I've been reading some of the recent "moonlighting" threads and they've been very interesting to me. While reading them, some questions about professional liability insurance coverage and general liability come to mind.

What happens if someone holding an academic position (a professor of some type of engineering, for example) wants to pursue outside work. Say he just simply enjoys the challenge and the work. For the sake of this discussion, there are no conflicts of interest and moonlighting is not discouraged by the university.

Question 1: If the professor works occasionally on a retainer basis with an engineering consulting firm, would he typically strike a deal with that firm that would effectively make him a temporary employee when he is working for them. By that I mean would he be covered with the company's own liability insurance, etc? Or would the typical moonlighting professor just simply not carry liability insurance. Would a typical engineering consulting firm agree to such an agreement with a temporary employee?

Question 2: Say the professor provides a highly specialized service to the engineering firm. The service is required only occasionally. Say that it would not be cost-effective for the firm to bring someone in with such skills as a full-time employee. Say the service provided is a small, but important, piece of the overall engineering project and that project is managed by an engineer-of-record; a full-time employee of the company. I understand that the professor could certainly be named in a lawsuit if it happens, but generally, would the company remain the engineer-of-record in a relationship like this if a lawsuit related to the project ensued?

 

[IRstuff]

If you are offering your services as a consultant or as a contractor or PE, you need to have liability insurance as a matter of course. You are a business, not an employee, in those circumstances and you should have business liability insurance as part of doing business.

To hope that you're "covered" or that a former client will "protect" you runs the risk of being naive.

TTFN

 

[TheTick]

I know a three professors who consult. They all became PE's decades ago. They all have insurance.

I would have deep reservations about hiring a professor who did not have a PE certificate.

 

[RDK]

Someone who worked exclusively in academia would not be able to get the practical engineering experience in many cases for a PE.

In Canada it would not be as much of a problem since we tend to define the practice of engineering much more broadly than is the case in the US. Academic and research would most likely qualify as engineering experience and it may not in all US states.

To not hire a PhD simply because they did not have a PE is somewhat shortsighted.

They may be in a field that is PE exempt.

They may have specialized knowledge in an area that you need to do your work.

Where I live and work if you are selling engineering services then you need insurance. If you are selling a completed project then you do not need insurance. (The need for insurance is Manitoba is much like the need for a PE license in many US states.) Having a P.Eng is mandatory as is having a Permit to Consult. The basic requirement for a Permit to Consult in Manitoba is to have E&O insurance.

If you were selling non engineering services, say developing computer models, you would not need to be an engineer or to have insurance.

Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[MRM]

I appreciate your responses. Everyone brought up some good points about the PE. I neglected to explain this in my initial post, but the professor we're talking about would have, say, 10 years of professional experience in their field (prior to entering academia) and a PE in the state where the work is being done. Also, he would only be working for a single company on a retainer basis, rather than working for multiple engineering firms.

It looks like the answer based on the situation I originally described, is that you are a business, doing business with a consulting firm, rather than a temporary employee doing business with the consulting firm.

I'm confused about why the professor wouldn't just be able to act as a temporary employee (working for a single company only) simply telecommuting from, perhaps, a different city. Instead of a regular 40 hour week, he is working 5 hours every other week, for example. Please let me know where I'm going wrong.

 

[RDK]

An employee is an employee if hired full time 40 hours per week or part time 5 hours per month.

An employee is subject to having income taxes deducted by the employer and many other things but most large firms use payroll services that do this . It is often easier for them to pay a casual employee than to pay a supplier/sub contractor invoice.

An employee would be covered by the firms E&O insurance where a sub consultant would not be and would have to buy this themselves unless they could limit contractual liability and the authority having jurisdiction allowed uninsured engineering services to be sold to the public.

For most purposes even one and only one client who is buying engineering services only and not design bundled with construction or manufactured product that is deemed as selling the services to the public.

Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[zdas04]

It has been touched on above, but let me focus on insurance. My B&PL insurance contract only applies to me and any employees that I have and the contract defines employee even tighter than RDK does above. If the IRS determines that I was extending my insurance to another engineer, but not withholding FICA then the penalties would be significant, to say nothing of my insurance company cancelling me.

Each insurance contract is subject to the terms that the parties negotiate, but I think that the employee language in mine is pretty common.

If I ever move on to acedemia (which I've considered), I'll definately retain my insurance.

David

 

[GregLocock]

Why couldn't the professor just work for the company's usual PE, who would be able to sign the drawings off, as the work was done under his direction?



Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[IRstuff]

There's a huge difference between an EIT and a full professor. You hire a professor because of his specific expertise and therefore, his output cannot be treated the same as the output of a neophyte engineer being directed by a PE.

In this case, one's lawyer might argue that even if the PE was actively supervising a professor, there's high probability that no one could full verify or vet the professor's output and therefore, the PE in charge cannot be fully liable and that liability also falls on the professor, being a subject matter expert.

TTFN

 

[GregLocock]

Oh. You mean I'm allowed to produce stuff that no one else can understand?

I disagree. A very large (and frequently frustrating) part of my job is explaining tricky stuff so that other people are comfortable with using it. This often takes much longer than the original work, but is also where the most value lies, to the organisation as a whole.

To be honest I would be uncomfortable with producing safety related recommendations that were not checked independently by someone else.



Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[Ron]

MRM....all of this depends upon what one can negotiate with an engineering firm. It is entirely flexible. If I did such work for a single firm, I would probably negotiate an indemnification clause that would make the company take on the liability. While that doesn't completely absolve the Professor, it can go a long way. Even minimal professional liability insurance will cost several thousand bucks a year.

As for the licensing....must be a PE to offer such services independently to the company.

Can the person be a part-time employee? Of course...it only depends on what the company is willing to do. IT'S ALL NEGOTIABLE.

 

[RDK]

IT’S ALL NEGOTIABLE

I believe that everything in life is negotiable as long as you are within the bounds of ethical behavior.

Of course sometimes you have a strong negotiating position and sometimes you have a weak negotiating position.

Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[Ashereng]

MRM,

There are a lot of different employment/work relationships. It all depends on the situations of each party.

For example:
1) Traditional Employee - a la RDK (40 hr/wk, benefits, etc.)
2) Project Hire - you are a full time employee for the duration of the project (open ended).
3) Term Hire - you are hired full time from Date to Date.
4) Spot Hire - you have a sitting agreement that they call you in (with a certain amount of notice) to work for (X amount of time), as required.

All of these arrangements is independent of how you are paid. If you are self incorporated or sole proprietor (e.g. RDK), you invoice and they pay your company. If you are a "employee", they will pay you direct (minus the taxes, EI, etc.). If you are coming in through a temp agency, they pay the agency, who then pays you (minus the taxes, EI, etc.).

The working relationship is separate from the payment relationship.

With regards to liability and/or insurance, there are a couple of routes:
1) Go naked - no insurance. Cheapest.
2) Buy your own. Most expensive.
3) See if they can add a rider onto theirs. Somewhere in between.

It all depends on the situation of each party to the contract.

 

[RDK]

Sometimes going naked is not an option.

Some jurisdictions like Manitoba only allow you to sell engineering services to the public (i.e. any outside agency) if you have a certificate of authorization. In order to get this certificate you must provide proof of insurance coverage.

I had coverage even before it was mandated by my local association simply because I did not believe that I could meet my first ethical obligation to protect the public if I did not have coverage to protect the public from my errors and omissions.


Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[DRC1]

If you are signing or stamping drawings for the firm, you should either be an employee or have coverage. If you are only working for this one firm, they may be able to extend the insurance to cover you also. Since this really would not be diffwerent than hiring a new employee, the cost of the rider might be minimal. Of course after 9/11 insurane is no longer simple. You do not want to be exposed. I would talk with your prospective firm and their insurance agent.