Site Classification fees in Australia

[sc]

With the recent increases in geotech PI Insurance costs and excesses (mine has increased by 50% and the excess by 250%) and building regulation requirements for providing PI Ins cover for long periods, should fees be drastically increased to cover these costs?

I know that fees for site classifications in accordance with AS2870 are generally between $200 and $500. From my quick calcs this does not adequately cover the cost of field time + equipment + office time + review time + insurance related costs.

I know that if I increase my fees without others increasing theirs, the only effect will be a reduction in my work load.

Any comments?


regards
sc

 

[ludvik]

I'm not a geotechincal engineer, but possibly i can offer some comment anyway.

I certainly agree with you that fees should go up to account for increased insurance premiums. It like a game of chicken - who will do it first? If you do it first and noone else does, you are in big trouble. You should probably not be the one that breaks and puts his premiums up first though. It will probably be led by a big player with a lot of market gravitas (like Coffeys) acting unilaterally.

The bigger thing which should happen is that insurance premiums should go down. They went up because of the HIH scandal. I don't know exactly why the failure of one firm should effect things so badly, but it has. I hope that in time things will rectify themselves.

There is currently a big to do going on in America about the insurance premiums that doctors have to pay. Their premiums have been skyrocketing because of the increasing number of malpractice lawsuits that have been leveled against them. The solution to the problem is coming down from on high - the President Bush is talking about tort reform and all the rest of it...the details of that aside, the bad news is that doctors have largely not been able to pass the increase costs along to their patients. It sucks, but basically the doctors just get to take home less pay than they used to.

 

[Focht3]

What is the story on the HIH scandal? I worked for their U.S. group for a (thankfully) brief period in the early 1990s. I know first hand how short sighted - and uninformed - their American management team was. (Lawyers have no business running engineering companies.)

Links to on-line articles would also be appreciated -



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[sc]

Focht3

No better place than here:

http://www.hihroyalcom.gov.au

It's the roryal commission web site into the collapse of HIH.

regards
sc

 

[ludvik]

You can think of HIH as Australia's answer to Enron.

HIH was the largest insurance company in Australia, and it collapsed recently in a blaze of scandal. The American equivalent would be AIG (American International Group) going under. The thing was that even if you got your insurance through another carrier, your other carrier was probably reinsured by HIH, so they were screwed to. For a while it was impossible to get professional liability insurace at all.

 

[Focht3]

Wow. A loss of 5.3 billion dollars AUD [about 34.3 billion dollars USD] - astounding. But I'm not surprised, based on my prior experience with a sister company. Do you think charges will be filed against the parent company, Huntingdon International Holdings PLC. ? Or will they escape responsibility - and punishment - yet again?

Sorry for the semi off-thread discussion...



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[BigH]

Focht3: As is done in the metric system, I think you missed a decimal!! Try 3.4billion rather than 34billion!
Paper sent in today.

 

[Focht3]

OOPS! That was a TYPO - the calculator had the correct value. Have to blame that one on the operator!




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[Focht3]

[blue]BigH[/blue]:

Missed the comment on our paper in your last post in this thread. When do you expect a reply?



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