Liability Insurance - Canada (Ontario)

[P205]

In reference to this thread:

thread732-388319

Can anyone from Canada (preferably from Ontario) speak to the questions posed in that thread? His suggestion to get a copy of the liability insurance policy and ensuring you are personally named on the policy good idea? How about getting secondary liability insurance for yourself either through OSPE or another avenue?

 

[Canuck65]

Been in the business 20+ years. Never heard of any fellow employees obtaining a copy of the liability insurance policy, I do not think they name each employee on the policy, but the insurance companies routinely cover any legitimate employees. Never heard of anyone having or needing secondary insurance through OSPE. You would have to do something pretty negligent or fraudulent to open yourself up to actions beyond the umbrella of the company. I have heard of, and followed several insurance claims (high 6 figure claims) and it was always directed towards the company, not the employee who's mistakes resulted in the claim.

I do recommend you speak with your supervisor to put your mind at ease. It is a good question that should be easy to answer and the information will be valuable to you moving forward.

I did some work on the side for a few years and maintained my own insurance for that company. I finished that work a few years back but maintain wrap up insurance in case a claim arises from my past work as a sole proprietor.

 

[moltenmetal]

If you are a P.Eng. offering services to the public under a name other than your own, i.e. under a Certificate of Authorization, it is the entity holding the Certificate of Authorization which needs to carry insurance. If you are assured that such a policy exists, you are covered if you practice under that C of A. You do not need to be named either under the C of A or under the insurance policy, because neither are typically specific to the practitioner- licensees and unlicensed people working under a C of A can come and go as long as there remains at least one signatory P.Eng. who takes "professional responsibility" for the work.

If you are practicing as a sole proprietor, it's a different matter. In that case, you and the business are the same entity.

A lawyer may be able to advise you whether or not the limits of liability may be set aside and the corporate veil pierced to come after you and your assets personally in the case of fundamental breach of contract, gross negligence, or for provincial or federal fines etc. You're not going to get reliable advice on that from an internet forum I'm afraid.

Here's what OSPE's website says about their secondary liability insurance offering, which is limited to $125,000 per claim and $1,000,000 total:

What is Secondary Professional Liability insurance?
Secondary Professional Liability insurance protects individuals against liability or allegations of liability for injury or damages that have resulted from a negligent act, error, or omission that has arisen from your activities as a professional engineer. This coverage is intended to supplement existing professional liability insurance, which members may hold through their employers or their own policies.

It is important to note that coverage is afforded on a "claims-made and reported" basis and will respond to claims made during the policy period. This means that the policy which is in place when a claim is made will be the policy to respond – regardless of when the incident occurred. Therefore, it is extremely important there is no lag or gap in coverage between policy periods. Coverage needs to be continuously in place to ensure you are continuously protected.

(end quote)

I would imagine the value of that insurance represents perhaps $20 worth of value in return for OSPE's annual fee, which is what, $180/yr? You'll have to assess whether or not that is good value for money, which I guess is determined by how likely you feel that your work is to get you sued personally.

 

[P205]

Thanks for your input Canuck65 and moltenmetal.

The secondary liability insurance that OSPE offers seems to be one of their biggest selling features for signing up. I have read that description moltenmetal, but it's just not clear to me without having examples of when/how you'd ever use it.

Other threads on Eng-Tips suggest that your employer can choose to not cover you for your mistake. I thought that this may be one of those scenarios. But then again, maybe that's in the states and not applicable in Canada or Ontario.

This thread is me researching the subject, as our company insurance policy is up for renewal and discussions are happening regarding various liability insurance matters.

 

[moltenmetal]

I've never heard of anyone ever making a claim against a secondary liability policy, or needing to- and if they did, $125,000 per claim wouldn't be enough to be of use. You could contact OSPE and see if they have a "success story" to offer in relation to the product. If none of their thousands of members has ever made a claim, that might be of some use for you to know.

It might be of some use if you're worried about your private activities becoming a liability target of an engineering nature, i.e. the napkin sketch of a deck for your neighbour that leads to a claim etc.

Again if you need accurate advice on this, consult a lawyer. But from my non-lawyer perspective, this is an ideal product for OSPE to offer: it costs them little to offer because there are so few claims, yet it offers apparent (possibly imaginary) value to people who might want to join because of it.

I'm not a lawyer, but I'm unaware of any example where an employer of engineers in Ontario can pick and choose whether or not to cover their employees under their E&O insurance policy on a case by case basis. They can choose whether or not to submit a claim to the insurer (paying a settlement themselves), and they can of course choose whether or not to continue your employment, but to my knowledge they can't choose whether or not to pay for a claim made against their employee over fear of a premium going up etc. and thereby shift the cost of the claim to the employee directly.