Stress Engineering and Insurance 2

[corus]

If I were to start a business in the UK selling my services as a stress engineer using my own proprietary software, what insurance would I need, if any? If so, how do you go about getting insurance and what is the cost etc.

corus

 

[Ashereng]

I don't know about the UK. On this side of the pond, as a start, you should probably consider:
- professional liability insurance (in case the stress calculation is wrong)
- general liability insurance (in case you spill coffee on your client's PC)
- director/officer's insurance (in case someone working for you does something and you personally get sued, or if you get sued by Elliot Spitzer for accounting shenanigans)

To get insurance, call an insurance broker or company. Again, for this side of the pond:
- Aon
- State Farm

Sorry about the response being North American centric. Hopefully, the parallel helps.
-

"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?

 

[Pressed]

[URL unfurl="true"]http://www.businesslink.gov.uk/bdotg/action/home?target=http%3A//[/URL][URL unfurl="true"]www.businesslink.gov.uk/&ref=http%3A//66.249.93.104/search%3Fhl%3Den%26q%3Dsmall%2Cbusiness%2CUK%2Chelp%26btnG%3DGoogle%2CSearch&domain=www.businesslink.gov.uk[/URL]

If this link doesn't have the direct answer they say that they link to gov agencies that do.


_______________________________________
Feeling frisky.........

http://www.tailofthedragon.com

 

[corus]

Thanks for the link. A search for Insurance on the site gives excellent advice, generally in line with Ashereng's comments on North America.

The site,however, gives no indication on the cost of this insurance. Without first calling an insurance broker I'd like to know if anyone has any direct experience, particularly in the field of stress analysis/engineering.

corus

 

[Ashereng]

For a "consulting" engineering company, the costs are, in North America again:
- general liability (the coffee on the PC thing), for $2Million is about $300.00 a year.
- professional liability (your stamp), for $3Million is about $12,000 a year.
- directors/officers's, don't know



"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]

I quote two ways. One where the client bears the risk and provides the insurance and a second through an intermediary who has the insurance and takes the risk. The second method costs the client an additional 75%.

Insurance is the white man's burden (Good Show script 1950's BBC radio programme). If you have it they sue you. Better set yourself up so your assets are not exposed. Trusts, Limited Liability Companies, off shore registration, wife's name stuff etc are better protection than insurance companies. Insurance companies fail to pay or even sue you later for recompense.

 

[corus]

In the UK the insurance is referred to as indemnity insurance which is compulsory for some professions such as lawyers,accountants etc., but not for consulting engineers. On the business link site it does say that many opt in to paying an indemnity insurance, and presumably some opt out of such a scheme. Looking at the figures from Ashereng it does seem too costly and stainer's comments suggest better ways, perhaps.
Many thanks

corus

 

[Ashereng]

Insurance for operating as a consultant is like insurance for your car. You have it, or you don't work/drive.

WRT general liability insurance, a lot of clients will not allow you onto their sites without it. They really don't need the hassle of coming after you for the $10,000 hole in the side of the trailer you made with the truck.

WRT professional liability insurance, it is a requirement to win the contract.

WRT officers/directors insurance, some people are starting to inquire about it, especially at some larger and mid-sized companies. Some are even starting to carry it. As the courts start to move towards holding officers/directors/owner responsible for those working for them (which they are), this will become one of those insurances that gets added to the package.

WRT (With Respect To).

These insurance is not to do with protecting your personal assests, and what not. It is more in line with having a "Permit to Practice" licensure.

Corus's OP was about starting a business. I am assuming he is not talking about him moonlighting. A business has certain overheads, insurance being a large portion of it.

"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?

 

[IFRs]

Insurance cost are proportional to the risk. If you are using your software to design sports arenas, expect a higher premium then if you are designing tennis raquets. Substantially higher.

 

[stanier]

In Australia many projects are undertaken with the Principal takes out project insurance. If you then take out more insurance then the insurance industry is double dipping.

The main problem with PI insurance is that it is never ending. Once you retire you need to keep paying the premiums.

Better to follow the leagl profession example. They establish a sole director company with the company in the wife's name. They become an employee of the company so are protected by the laws of vacatious liability. The company has no assets. The personal assets are in the husband's name (fearful of his wife leaving him and taking all the family assets).

If the company is sued it goes into liquidation. The sole director (wife) has no assets and so goes bankrupt.

Other family assets are tied up in trusts in the Cayman islands.

The company's lawyer who wants to sue first establishes if there are any assets. When the lawyer finds there is none available he loses interst for his client weont get any money. CHances are he wont either so gives up.

The psychology is to make it harder for people to get your money. For if you have money available they will come after it even if you are not at fault.

 

[mrgoldthorpe]

Corus,
Take a look at this link for Professional Indemnity Insurance:

http://industry.iop.org/mem/pii.html

The Consultancy Group of the UK Institute of Physics is a good forum for one-person bands, providing valuable advice and contacts. You don't have to be an IOP member to join.

The Group is affiliated to the Joint Consultancy Forum:

http://groups.iop.org/CO/jcf.html

I'm sure other Consultancy groups provide PII information.

 

[corus]

mrgoldthorpe,
Very interesting and useful sites which I'll spend some time mulling over.
Many thanks

corus