Partners don't want to pay for prof liab insurance
Partners don't want to pay for prof liab insurance
(OP)
One of the companies I own is a mechanical contracting company. We have "engineering" in the name. I'm the responsible PE in charge on the certificate of authorization. I just found out today that in a cost cutting move, the two other partners (non PE's) allowed the professional liability policy to lapse 4 months ago. After I filled out the renewal form, they simply didn't write the check. I've sent out quite a few proposals in that time, and completed work.
I'm not comfortable operating without the PL policy, but our state doesn't require it. Any one else ever run it this issue, or am I the only moron who has non-PE partners?
I'm not comfortable operating without the PL policy, but our state doesn't require it. Any one else ever run it this issue, or am I the only moron who has non-PE partners?





RE: Partners don't want to pay for prof liab insurance
TTFN
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RE: Partners don't want to pay for prof liab insurance
With no professional liability insurance, your company can still be sued and if successful, your non-pe partners will share in the pain. They are nuts for dropping the insurance.
I have a simple rule in my business and when I was a senior level officer in other engineering firms...if the person is not a licensed engineer, they don't run the business, whether it is a branch office or the main office. They have nothing to protect (a license) and their decisions reflect it. They just don't get it.
RE: Partners don't want to pay for prof liab insurance
When you get new insurance make sure that the projects you did while you weren't covered get covered.
RE: Partners don't want to pay for prof liab insurance
They do not sign the check, you do not sign any proposals/drawings/documents that come your way.
It seems to me that they need you more than you need them.
RE: Partners don't want to pay for prof liab insurance
Dan - Owner

http://www.Hi-TecDesigns.com
RE: Partners don't want to pay for prof liab insurance
Do they need you more or you need them more? Proablly time to dissolve this company and start a new company or talk to a lawyer. And if the paperwork/partner's agreement/contract is not in order, time to do it is now.
Rafiq Bulsara
http://www.srengineersct.com
RE: Partners don't want to pay for prof liab insurance
Also, I found out an interesting thing about PL insurance a couple of years ago. You are only covered while the policy is in force with that company. As soon as you stopped paying, your relationship ended and anything that was insured prior to your policy lapsing is no longer insured. At all. When you start back up with the same or another company then your coverage begins for work done from that point forward. Work that was done prior to the start date of the new policy will not be covered by anyone. There are "bridge policies" that can be purchased, but they are hideously expensive. I've been with the same company for 7 years, and for the first 5 years I shopped for a better price every year. Sure glad I never found one, because by staying with the same company the work I did 7 years ago is covered. Had I changed to save a few bucks the clock would have started there.
I'd have a Come-to-Jesus meeting with the partners that would probably end up with the partnership dissolving in blows.
David Simpson, PE
MuleShoe Engineering
www.muleshoe-eng.com
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RE: Partners don't want to pay for prof liab insurance
I am not a lawyer and not familia with US law, but that sounds unbelievable really disgusting if true.
My dealings with insurance companies in general gives me no reason to doubt it and my observations of your posts on this site gives me every reason to believe it.
While I would never advise a punch up with partners, but with such an extremely irresponsible act, I would certainly be drawing on all my resources to retain control.
I would certainly be very tempted to feign a disaster from one of my designs from that time frame to try to scare them sufficiently to drive home the point.
The OP
Can you recall your designs issued in that time frame and do minor adjustments and reissue after the old policy is reinstated, that is if it can be reinstated with all retrospective liabilities in place. I think you rather than your partners need to pursue this with the insurance company.
I think you need professional legal advice as to where you stand with your old insurance company, any potential new insurance company and your partners.
Re sharing the pain, while someone said an engineer is in gaol over a disaster in Florida. I would expect that was from criminal negligence and would be independent of civil damages. I expect the engineer is responsible at a criminal negligence level, but the company and all directors or owners would be jointly and individually responsible. Those who bear the most pain in that case will depend on who gets sued. Who gets sued very often depends on who appears to have the most assets.
Regards
Pat
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RE: Partners don't want to pay for prof liab insurance
Do whatever you can to get out of this "partnership" with them covering your liability for the jobs you unknowingly did while uninsured. Call a lawyer, they should be able to help you with this.
Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com
RE: Partners don't want to pay for prof liab insurance
In other words, you are insured while your policy is current for the time period when that policy was in force. If you let it lapse then people can sue you for stuff that happened while you were insured and no insurance company will pay a nickel.
The guy that went to jail in Florida stamped a drawing that he didn't prepare or review and it was incompetent. The courts found the design to meet the standards for criminal negligence. While he was in jail a bunch of civil suits were filed. I haven't seen an update on that case in several years so I don't know how it all sorted out.
David
RE: Partners don't want to pay for prof liab insurance
That seriously undermines the value of having such insurance.
Regards
Pat
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RE: Partners don't want to pay for prof liab insurance
RE: Partners don't want to pay for prof liab insurance
Which parking garage are you referencing?
Ron
RE: Partners don't want to pay for prof liab insurance
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Partners don't want to pay for prof liab insurance
If this rings any bells, please feel free to correct any nonsense in the above. I don't design structures so the story didn't have a lot of relevance to my practice.
I looked for this in Google, but it is either apocryphal, too old, or my Google skills are inadequate.
David
RE: Partners don't want to pay for prof liab insurance
I think you have it right...hystrionics! There have been only two parking garage collapses in Florida in the last 5 years....Berkman Plaza in Jacksonville and a canopy structure at Tampa International Airport. Resulted in 1 death in Jacksonville (too many) and the investigations are ongoing. The engineers have not been charged criminally, though in the Jacksonville case, the engineer's design has been implicated by many. My partner and I are working on this investigation. Not divulging anything that isn't public knowledge.
I did an evaluation of a deficient parking garage in Miami about 15-18 years ago. Did load test and strain monitoring. Wrote a paper on it that was published in Civil Engineering Magazine. No collapse, no injury...just construction corrections.
I did investigate the collapse of a structure during demolition in Miami about 16 years ago. It was the Biscayne Kennel Club and there were 2 deaths in that one.
What does this have to do with the subject? Well, professional liability insurance is provided on a "claims made basis". This means that the timing of the claim is important to the coverage, as you noted.
You've made me want to go back and read my policy!! You now owe me a beer for having to read that crap...again!
Ron
RE: Partners don't want to pay for prof liab insurance
As rational people we want to think that the insurance companies assume a liability forever (or at least as long as the statute of limitations) for the time period that you paid for coverage. It doesn't work that way with your homeowners insurance--once you stop paying a company they wash their hands of you and the new company can get sticky about pre-existing conditions. Same thing with PL insurance. If you get sued for an event that happened while you were insured by someone else (or not insured, or a different policy number with the same company) then they "disavow all knowledge" of you.
David
RE: Partners don't want to pay for prof liab insurance
It is not selling security, it is collecting premiums. A perception of security is merely only an aid in doing this.
Regards
Pat
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RE: Partners don't want to pay for prof liab insurance
RE: Partners don't want to pay for prof liab insurance
David
RE: Partners don't want to pay for prof liab insurance
Any chance it was actually a performance bond policy?
RE: Partners don't want to pay for prof liab insurance
Regulation of contractors' insurance is nothing new, I'm speaking of events that occured over twenty years ago.
RE: Partners don't want to pay for prof liab insurance
Boy, did that wake people up. Meeting with agent is set for Friday morning.
RE: Partners don't want to pay for prof liab insurance
Dan - Owner

http://www.Hi-TecDesigns.com
RE: Partners don't want to pay for prof liab insurance
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Partners don't want to pay for prof liab insurance
In many jurisdictions, your company can be sued... and your partners can countersue you!
Just because you don't sign a proposal, etc. you may be liable, anyway... being the only technical person with an Engineering company.
Just a couple of thoughts.
Dik