Professional Liability Insurance for Office?

[TehMightyEngineer]

As a soon to be licensed engineer I asked my boss if he wants me to take over some of the responsibility of stamping drawings when he's out of the office. He said he would like me to do that since he was the only PE and was quite the bottleneck for those weeks where he would spend more time out of the office than in it. I asked him how the liability insurance would work and he brushed it off saying that the insurance was for the business and would cover me as well. This doesn't seem right so I figured I'd ask here if this was common to have insurance for a business cover all of the practicing engineers. Should I press him further for details?

Maine EIT, Civil/Structural.

 

[msquared48]

It is common, but the policy needs to state that. It would not be unreasonable for you to ask for a copy of the policy to examine, at least the sections that pertain to that subject.

Mike McCann, PE, SE (WA)

 

[TehMightyEngineer]

Thanks, I'll do that.

Maine EIT, Civil/Structural.

 

[Ron]

Agree with Mike. In most companies, the employees are indemnified by the company for professional liability and do not need their own separate insurance. If the insurance is in the name of the "company" that is usually sufficient to cover you. If it is in the name of the owner, you need separate insurance.

 

[SteelPE]

I was always under the impression that if the insurance was in the name of the company.... and anything you signed has the name of the company on it you would be covered..... but I may be wrong about that.

 

[Forensic74]

I suggest reading through this for a start

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

My understanding of it all (take it for what its worth).... The insurance for the company typically only insures the company. If/when a suit is filed, GENERALLY the lawyers will only go after the company and not the engineer personally. However, it is important to understand that the PE is not usually covered personally. I have seen engineers sued personally separately from their company, so its not unheard of. In those cases, any extension of monies to you to defend such a suit is on a good will basis from the company. Furthermore, I have spoken to my attorney and confirmed this. It is a good idea to put together an asset protection plan when you receive your license and start using it......not after you get named in a suit. One of the biggest protections in my state is that they cannot go after my house IF it is jointly owned with my wife. Everything else is fair game with varying degrees of hurdles for them to jump.

You can see how this would get complicated, especially if you get named in a suit after you leave your current company. Nobody offers professional liability insurance to individuals unfortunately.... it would be prohibitively expensive for a reason.

IMHO, this should be the biggest reason we receive a pay raise when we receive a PE.

 

[Ron]

Forensic74...in some states of the US, the engineer can be held liable for actions on behalf of the company. Not so in all states. You have to check the individual statutes.

The major engineering societies have fought strongly against individual liability on the part of engineers; however, they have been unsuccessful in preventing statutory allowances to sue the engineers individually in some states. In my state, the engineer can be sued individually, separate from the company. Still, in most cases the company will defend the engineer as it is in their best interest to do so.

 

[glass99]

My understanding of the mechanics of this is that there is a small possibility of an individual PE being named in the lawsuit in addition to the firm, so for that reason the a firm principal will general stamp all documents. I never stamped anything when I was an employee. This has been the case at all three US firms I worked for. It would frankly have been unthinkable to have a junior or fresh PE stamp documents.

Also in general, I never stamp things unless I am forced to.

 

[CELinOttawa]

Depending on the jurisdiction, the "never stamp unless forced" approach doesn't work. I am REQUIRED to stamp all documents that contain specialised engineering knowledge, right down to proposals for work!

 

[Ron]

I don't understand the hesitation to sign and seal engineering works for which you are responsible.

Each time I do so, it makes me think carefully about what I'm doing.

 

[msquared48]

Now I stamp all of what I do, except shop drawings and proposals. Always have as a sole proprietor. However, when I was working for major firms in Seattle many years ago, one of the partners would stamp the project.

Mike McCann, PE, SE (WA)

 

[SNORGY]

So sad that on both sides of the border we have been conditioned to become so afraid of being sued that we are reluctant - often terrified - with respect to professionally endorsing our own work.

Applying one's stamp or seal should not be something that one is afraid of. It should be something that one is proud of.

My attitude is that, if I *did* the work, I *stamp* the work. On the occasions when the time I was taking do that had aroused the ire of my "superiors" who were anxious to "just get the thing stamped" already", I have dropped my pencil, handed them the work along with a calculation pad and a calculator, and extended them the opportunity to do it themselves. Not once in my 32 year career has anyone ever taken me up on that offer; it turns out they are either much less qualified or much more scared than me.

That's what separates a P.Eng. or PE from an MBA.

 

[Forensic74]

Once you see how a few lawsuits work in our profession, you stop being proud of applying your stamp. You can be as careful as you can and make ZERO mistakes and still be dragged into litigation for the craziest things. Particularly when it comes to personal injury, I see a lot of attorneys taking the shotgun approach naming everyone across the board and hoping you settle for 20-30grand rather than spending the effort and legal fees to defend the obviously frivolous suit.

 

[TehMightyEngineer]

I'm with the camp of people that say stamping a drawing isn't something to be afraid of. Of course I wouldn't stamp anything that I was not comfortable stamping nor anything that was outside my level of expertis. But in our small office I am much more familiar than my boss with certain aspects of AASHTO, AREMA, and some other codes. Those are conveniently also the items that I regularly need stamped when my boss is not around. In the frequent circumstance that my boss knows more than I do about a project I would obviously avoid stamping it even if I felt that I was competent.

Also, given my current situation it wouldn't be worth it to sue me.

But please tell me more about this. I really appreciate it and definitely need to learn more.

Maine EIT, Civil/Structural.

 

[SNORGY]

Forensic74,

It's not apparent from my post, but I do completely agree with you. I should have elaborated on the "So sad that..." part of my post.

Unfortunately, while we have to let lawyers be lawyers, I have come to the conclusion that this should not discourage or prevent us from being engineers. Yet it does - and understandably so - for the reasons you state.

Legislation needs an overhaul on both sides of the border.

 

[Forensic74]

Ha, I would be really cautious about "not worth it to sue me" when fraudulent cases typically shoot for the 20-30k settlement range. Small office situations are typically worse for liability reasons as there is less of a "bank" to fund any defense. You would be surprised at how many firms don't understand what their professional liability insurance covers and how they react when the poop hits the fan. Dont be so sure that your boss is going to cough up defense fees out of his own budget to cover a personal suit against you unless you're working under a specified contract and not at-will. And dont think that the suit would be something obvious like a beam failing.... it usually has something to do with workmanship or an injured worker where they name the G/C, subs, suppliers, and whomever is the EOR.

I'll admit that I'm probably jaded because I serve as an expert witness for attorneys every once and awhile and see firsthand how these suits go and what people say in depositions.....

 

[TehMightyEngineer]

That was semi-sarcastic; obviously one could sue me and obviously they do. I actually recently served on a jury and am well aware that anyone can get sued at any time, with engineers being much more at risk. Still, not going to stop me from stamping a few drawings. But please offer any advice to avoid risk. I'll definitely research more myself but any directions to look or tips you have are much appreciated.

Maine EIT, Civil/Structural.

 

[glass99]

I avoid stamping things because I don't want to get sued! There are others in the facade consulting business who have a policy of never stamping anything, like Front for example.

In my work I can frequently negotiate out of stamping things. For example, if I write a calculation report for a facade contractor client, and the client is a PE who is effectively supervising my work, why not let them stamp it themselves?

I try to only stamp a calculation reports and not drawings because drawings have a bunch of non-structural bits on them which are difficult to tag as being not part of my scope. I put a screen shot of all the critical details in my stamped report so I am more narrowly defining my scope of liability.

For primary structures work, I refuse to stamp the final TR-1 form (aka the inspection sign off required for the building to be occupied) unless the client has paid their bill.

I always charge extra when a client expects a stamp, and I like to create a sense of it being a "sacred act" which I will only confer on worthy documents.

 

[Ron]

In reading through these posts, I've seen some naive comments about one's liability as an engineer.

Stamping (sealing) is not the only action that creates liability on the part of the engineer. If you are licensed, you are held to the licensing standard (the statute) in your practice, without regard to the actual act of stamping. Read your statute carefully....I've read quite a few of the statutes around the country and many are similar. In almost all instances, an "engineering service or work" is statutorily defined and requires a seal whether you think you can negotiate it out contractually or not. A contractual agreement does not override the statutory requirement.

As an example, let's suppose you do the calculations and design necessary to place or replace windows in a structure. You tell the client that it will be X dollars for the service or it will be X+Y if you must seal any part of your work. Client says he only wants to pay X so that's what you charge and you give him the design. You did the same work that you otherwise would have sealed but for the client's unwillingness to pay. Now comes a construction defect claim that the windows leak. You don't worry too much because a leaking window does not necessarily mean it is structurally deficient; however, in the process of evaluating the claim, another engineer reviews your work in the course of the investigation and cannot find anything sealed by an engineer. Knowing that windows are usually considered part of the components and cladding and can be critical to the structural design efficacy (whether the building is considered enclosed or partially enclosed), someone decides to chase you after they have figured out that you provided an engineering service, whether sealed or not. Now you have two problems....first is the fact that you probably violated your state law by not sealing your engineering work, and second, you are part of a construction defect claim that might or might not have validity to your work, but nonetheless you have to prove and defend it.

Be careful. Know your state's laws and rules. Don't let clients subvert your statutory requirements. Liability tentacles are often long and probing.

 

[TehMightyEngineer]

Thanks for the info Ron, that does make a lot of sense. I've often felt that offering a design price without a stamp, and another price with a stamp, was a disservice to both the engineer and the client. Good to know that there is actually a good reason to stamp it as well.

In any case, I'd like to think that if I designed it then I thus took the time to do it right I should be able to sleep at night, without worrying about how many things that I stamped that I might have been able to avoid stamping.

Maine Professional and Structural Engineer.
(Just passed the 16-hour SE exam, woohoo!)