Question about starting a side consulting business and insurance? 1

[runoff]

I have a quick question about E&O insurance and having the insurance for part time work. I have a full time job at a company but at times I have the opportunity to do some work for a friend of mine when he needs some Civil and Environmental Engineering work done. I talked to an insurance agent about insurance and filled out all the paper work. The problem is they said I do not generate enough revenue in order insure me and they usually do not have E&O insurance for part time consulting. Is this true for others that have maybe done this type of work? I checked four insurance companies and get the same response. It is not that I don't think I do good work but you all know how it is with liability and the good old tort system of America, which I will not get into on this forum.

If anyone has some input, I would appreciate it. I do not do structural because of course that holds the greatest liability in the civil field but just wondered if anyone else has run into this situation. Thanks for the input.

Runoff

 

[proletariat]

A friend of mine does residential structural without any insurance. Basically he seals house plans for renovations and code deviations, and feels comfortable doing it. So, yes there are people operating without insurance out there. Probably more than you would think.

 

[Ashereng]

If you are not stamping anything, then, E&O may not be as important.

If you are stamping, then E&O is good to have, since as you say, "the good old tort system of America".

Usually, part timers can't justify the E&O insurance because they are only working on the side, part of the time.

"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

 

[Hoagie]

While you study and choose a policy for E&O, consider addtional coverage to cover deductible and your attorney fees.

Good luck,

H.

 

[cvg]

don't sign or stamp anything without the insurance coverage, unless you like to gamble. If possible, see if you can be covered by your friends insurance as a contract employee. Hoagie has good advice also. You can be named in a lawsuit and will have to defend yourself, even if there is no judgement against you. Unless you also sideline as an attorney, it is best to hire one at a minimum of $150 per hour. Don't plan on suing to recover your attorneys fees either, unless you can afford to go to trial.

 

[IFRs]

Contact a lawyer, accountant and estate planner. Put all your assetts in your wife's name. Get E&O insurance. Form an LLC. I have a quote for $5900 for the first year based on $100k of stamping, $1Million coverage (legal fees come out of the 1Mil). Stamping without protection is like gambling. Especially bad if you have a lot to lose.

 

[cvg]

by the way, putting your assets in your wife's name won't work either (at least in the US). Your wife can also be named in the lawsuit. Even if she isn't, your debts become her debts also.

 

[Ashereng]

cvg,

Your are right. Putting your asset in your wife's name isn't used. My lawyer friend, who is a partner in the firm, moved his assets into a trust. Although also not 100% proof, it is much more diffiult (courts are less inclined to override a trust).

"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

 

[stanier]

Set up an offshore company and provide the services via that entity?

 

[BigH]

Get indemnified by your friend - or other clients so that they take you on their insurance. But, get a lawyer to set this up. We always say, don't try to do geotechnical work if you aren't a geotech - don't try to be a legal expert unless you're a lawyer!

 

[ctmtwilliams]

Why not work for your friend as "contract labor" on a 1099? That way you should be covered under his insurance. BTW, I thought if you stamped something you became personally liable for what you stamped.