Side Jobs, Insurance, Reviewing Others Work

[AndyRonLI]

Folks,
I'd like to say this forum is already a great source of info. Want to kick a few conclusions out there and let you throw rocks. I have made a few posts regarding this and have been searching the forums related to E&O insurance.

So my research tells me....

If I physically harm some one due to an undersized ridge beam ie the roof falls in on their head. I need liability insurance.

Even if the roof falls in and no one is hurt, there is still the financial liability for which I need E&O

As the licensed professional stamping a home design all that liability is mine. Even a direct contract with the ultimate customer for the plans doesn't prevent a lawsuit.

And now my judgement tells me....

If an unlicensed professional wants my approval of his or her design it is not unreasonable that part of my "rate" includes some reasonable portion of my E&O and liability insurance costs.

Thus in the beginning when I do not have a large volume of work and will be probably be charging less than larger more established companies I may in fact have to suck it up and go out of pocket for a year or two. I don't mind doing this necessarily. This is a part time start up and I am willing to invest a bit for a while to get in the black. My brother did the same with a white water rafting business but I think he had more fun ;-)

And finally a question.
I am still looking for cheap E&O. Seems it is all based on cash flow and the minimum here on Long Island (NY) seems to be $3K to $4K based on a yearly revenue stream of $50K. I wont be doing a quarter of that for the first year or more. Last time I was officially an NSPE member I couldn't even get a quote for a business that makes less than $50K/yr. I have to believe there are a lot of part timers out there who could use E&O. Anyone have any contacts?

Thanks for all the help
-Andy R

 

[DonPhillips]

Looking at the ridge beam example, if the beam (undersized or not) were dropped by you while installing it or you did not fasten it properly, then liability insurance may cover it (if not gross negligence). Otherwise, E & O would be needed.

You can state your earnings to be anything you want to secure the insurance but the $3k to $4k on $50k gross sounds a little high. My guess is $3k to $4k is for billing up to some number like $100k or $150k. My billings are in that range and so is my E&O premium. My carrier is XL so I would start with them.

E&O coverage or not, you may want to ensure you have written contracts between a corporate entity (Inc, LLC, etc.) to protect your assests. And make sure you limit your liability to something appropiate to your compenstion.




Don Phillips

http://worthingtonengineering.com