liability question - working for another engineer
liability question - working for another engineer
(OP)
Hello,
I have a question about liability. I have a PE license and most of my experience is in industrial building design. However, I want to start doing residential design using timber. I have an opportunity to do some work for a couple of other PEs on a contract basis where I wouldn't use my stamp. (I don't want to use my stamp until I get a few houses under my belt)
So, I'm wondering what I'm liable for if one of these guys who I'm working for gets sued. I have a little personal savings but no E & O insurance and only one of these other guys has it, the other one doesn't. I don't think either of them is incorporated or anything like that.
One argument against getting insured is that it attracts lawyers and law suits. Does anyone have a feel for what's at risk here?
TIA
Mark
I have a question about liability. I have a PE license and most of my experience is in industrial building design. However, I want to start doing residential design using timber. I have an opportunity to do some work for a couple of other PEs on a contract basis where I wouldn't use my stamp. (I don't want to use my stamp until I get a few houses under my belt)
So, I'm wondering what I'm liable for if one of these guys who I'm working for gets sued. I have a little personal savings but no E & O insurance and only one of these other guys has it, the other one doesn't. I don't think either of them is incorporated or anything like that.
One argument against getting insured is that it attracts lawyers and law suits. Does anyone have a feel for what's at risk here?
TIA
Mark





RE: liability question - working for another engineer
Per my attorney, this approach helps to "prove" that you and your business are separate entities - unless there is gross negligence (hard to define, however) or other serious failures, your liability "may" be limited to the resources of the LLC.
However, there are no guarantees.
The one-person LLC offers an advantage at income tax time - tax filing (mainly using Schedules C & SE) is integrated with your personal return. No "corporate" return to file.
Best Wishes
www.SlideRuleEra.net
RE: liability question - working for another engineer
MarkAJohn, as long as you are doing detailing, drawings, etc., you should not have any problems. Not having E&O presents some risk for this, but also keeps you from being a target. Just make sure on your correspondance / invoice / etc. that you list the work done as detailing, drawing, etc. and not engineering or design.
Should work fine as they are the ones stamping the final designs to accept responsibility as EOR.
ZCP
www.phoenix-engineer.com
RE: liability question - working for another engineer
Thanks for the reply. I'm in California which most people, although not all, think of as part of the US. Where are you?
Do you think all this would be necessary even if I don't use my own stamp?
MJ
RE: liability question - working for another engineer
Then have signed contracts between you and the engineer that you are working for that contains a term limiting your liability to the payment for the services and that the customer engineer will hold you harmless form any and all actions arising out of the work.
Make it clear in the contract that the client engineer will be assuming professional liability for the designs.
These terms can be in place and then included in all subsequent work by reference.
Any correspondence should be on company letter head. E-mail should be on a company account and not your personal account. Have a signature block that says
John Doe PE
Doe Engineering Inc.
It is very cheap to set up a web site, even if it is only for e-mail. You can also have a corporate identity easily by buying your paper supplies through a company like Paper Direct and using one family for business cards , letterhead, envelops etc. (I use influential and have bought the electric graphic’s and use them on my web page.
Basically you want to make it clear that you are dealing through a corporate entity and not acting as a provide person in your business dealings and yes it is necessary even if you are not using your stamp.
Talk to a lawyer, an accountant and an insurance agent to get the necessary professional advice. Don’t take advice from strangers on a web site, use the information here only to educate yourself on what questions to ask your professionals.
Rick Kitson MBA P.Eng
Construction Project Management
From conception to completion
www.kitsonengineering.com
RE: liability question - working for another engineer
RE: liability question - working for another engineer
RDK's suggestions for a separate business email account, website, stationery, business cards, all make good sense.
With basic software your can even print your own (near professional quality) documents as needed - I do this.
Another suggestion, be sure to obtain any required local business licenses, and at income tax time report every dime of income. This is offset by the fact that the cost of many things, such as building codes, reference books, professional society dues, website hosting fees, etc. are deductible expenses to your business.
Here is a respected website for "information" (not a substitute for specific, professional legal advice) on business matters
htt
www.SlideRuleEra.net
RE: liability question - working for another engineer
So, do any of you have any recommendations for insurers, especially in California?
TIA
Mark Johnson PE
RE: liability question - working for another engineer
If you're an employee of engineering firm with errors and ommisions insurance, the company attorneys will defend you. It is irrelevant that you stamped a report or is even a project you've worked on. As long as you;ve worked for this firm, you're liable.
If you're a contract employee(1099)form where you pay your own estimated taxes quarterly then you may have to defend yourself and pay for your own attorney-since you're not an employee.
Remember you don't have to do anything wrong or have a failed structure to be named in lawsuit. Usually in most states they have 5 yrs to file a suit from the end of project, but in California it is 10 yrs. If you're not involved in Condo's, structural renovations, real estate sales crtifications or Tract housing development, then you've lessened your chances.
In my opinion, if you do work that is of locally accepted practice and is of standard care then you have done all that you can.
If it will make you feel better, I have observed that ALL great engineers have been suided several times in the course of their careers-it is really when and not if you'll be sued.
We must produce work that will improve quality of life of our communities, make a buck for ourself and be glad that we can see our work makes a differenece.
RE: liability question - working for another engineer
Search for articles by an attorney, Kerry Williams, P.E.
John
RE: liability question - working for another engineer
RE: liability question - working for another engineer
The best thing that u can do in my opinion as you are a designer, to get a job and sign contracts with a another companies to do the construction with specific agreements. by this, u can minimize the liabilities as much as possible. and u can determine the profit. You know these ideas are applied by small & International Companies in projects.