Cost for signing/sealing one drawing 1

[rvellia]

My first post here, although I've used this site for help in the past without posting anything.

I am a licensed PE (electrical) and have been venturing into side gigs more and more recently. My side work has picked up where it's almost as much as my day job. Recently, a potential client reached out to me for assistance creating a single line diagram for a solar farm that will be grid tied to the local utility. They need this drawing to be signed/sealed by a PE. I am willing to do the design and sign/seal it but I have two questions:

1) What is an average cost for something like this. I haven't done a one off sign/seal to date. FYI I am located in New York.
2) Should I be worried about insurance? I am in process of creating my own PC (professional corporation), but I don't have any insurance set up yet.

Any and all comments are greatly appreciated.

Thank you.

 

[allgoodnamestaken]

IIRC where I live it is actually against the professional engineering association's bylaws to offer engineering services without insurance and you could be reprimanded for it.

 

[rvellia]

@allgoodnamestaken hmm that is interesting I will see if I can confirm whether or not this is true for my state. Thanks for your input.

 

[dogtop]

Insurance, insurance, ... insurance. By signing the drawing you are taking the liability that comes from design work. Consult with an attorney to go over the laws in your state and industry.

 

[oldestguy]

Even if this job does not go tyhrough, you should have a standard agreement clause for a contract with clients. One item I had in mine that meant a lot of changing of investments as to owner (wife). The portion of the agreement said in effect, any claim against me would not be toward my assets or relatives. Luckily it worked.

 

[BrianPetersen]

Where I live, if you are offering services to the public (i.e. your client) you need a certificate of authorisation from the governing body, and for your own protection, you really should be incorporated and insured with the C of A issued to the corporation. It is possible to get a C of A for a sole-proprietor (unincorporated) engineering business, but it is a risky affair.

The (small) company where I work was started by the person who is now my business partner and it started out as a sole proprietorship, but one of the things I pushed for (having told my previous boss that I didn't need him any more!) was to incorporate the business. That was done several years ago and we haven't looked back. Consider that a bit of encouragement if you wish ...

As for the cost for such a service ... as mentioned, you have to take into account that you are now responsible for the design. I'd quote it just as any other job. Figure out how many hours it will take you to do the necessary calculations and factor in some allowance for things-gone-wrong and multiply that by some reasonable hourly rate. A bit of digging should turn up what a normal hourly rate for engineering services is in your area.

 

[rvellia]

Thank you all for your responses.

Once the paperwork is finished for my PC, I'll look into the insurance thing. Another former colleague of mine who has his own PC also recommended insurance if I will be stamping documents.

@oldestguy the fact that this will be through my PC means they cannot come after my home or wife or anything else. I am not worried about that.

@BrianPeterson I'll look into the COA requirements in my state, thanks for the headsup. As far as cost I have an idea of what a "fair" rate is, I'm just not sure if this client, or future clients, will want to pay someone who is just starting his business.. regardless of the fact I have my fair share of experience.

Thanks again..

 

[jpankask]

"@oldestguy the fact that this will be through my PC means they cannot come after my home or wife or anything else. I am not worried about that."

I have not worked started or worked for my own corporation, so just a friendly bit of advice for consideration...you should seriously look very deeply into the legalities of this. While true that generally the employees of a corporation are not held personally liable for the actions of the corporation, the principles/decision makers of a corporation can be held criminally and personally liable for the actions of the corporation. If a design that you have stamped and certified were to fail and cause loss of life, the lawyers for those families will pursue every means available for compensation. Your stamp on the drawing is a great big target.

 

[Maui]

Rvellia, you should read this:

http://www.nspe.org/resources/professional-liability/liability-employed-engineers

Maui

 

[Maui]

Also worth reading is "Claims Against Design Professionals", especially the section on the limitations of liability:

http://www.skellengerbender.com/publications/PDFs/construction_design/claims_against_design.pdf

Maui

 

[rvellia]

@jpankask I will review this with my accountant and double check.

@maui thanks for the links I'll take a look.

In this particular case, the design is a small PV array that will be grid tied to a local utility. The purpose of the sealed drawing is to get approval from the utility company. At this point, should I be concerned with liability at all? I would imagine if the application is approved and the job requires formal engineering documents at that point I would have to worry about insurance. Opinions?

Also, I could always begin the work and obtain the insurance while I'm designing the job correct?

 

[oldestguy]

Getting insurance is a not just a simple thing like making a phone call and sending a check. No one will extend it to you without a serious check of your record and perhaps even not offer reasonable coverage. Due to the cost for some types of engineers, going "bare" may be the only option. I did that for a few years and hoped that my contract wording would save losing a lot. Luckily no claims.

 

[FreddyNurk]

Consider that the utility's purpose in requiring a PE to sign is often about both having someone accredited to make sure the job is done properly, but also someone to hang out to dry if there are subsequent issues that may be able to be traced to the installation of the inverter equipment. This includes the inverter complying with the relevant 'anti-islanding' standards and so on, as well as possible issues from inadvertent energisation of the network. Not all of it can be assigned to the contractor who carried out the installation.

Consider that there may be other documentation required (and I'm speculating here, I'm on the opposite hemisphere) such as Safety in Design documentation to be handed to the contractor, supporting calculations and so on. Where I am the utility doesn't expect PE sign off unless the system is over a certain size, so it may not be relevant.

 

[Ron]

the fact that this will be through my PC means they cannot come after my home or wife or anything else. I am not worried about that.

I'm not sure where you are located, but you seriously need to consult an attorney and your statutory exposure on this one. In my state, even if an engineer works for a company and the services were provided through the company, because he/she is separately licensed from the company (as an individual), they can be sued individually. It happens routinely. I'm involved in at least 3 cases currently where the design professional and the company were both sued for the DP's actions.

 

[cywright]

Hi rvellia,
I am a military spouse getting started in this field as a career transition after 10 years in manufacturing. I am preparing to attend some conferences this year. I would love to interview or ask you a few questions to find out what you did to get started in this field and land your first clients. Let me know.