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Structural Liability Insurance and Moonlighting

Structural Liability Insurance and Moonlighting

Structural Liability Insurance and Moonlighting

I'm a PE considering moonlighting. Thought it wise to form an LLC and obtain Professional Liability Insurance (PLI). Estimate I would bill out $10K to $15K/ year. I'm in CA and received prelim estimates of $2K to $7K/ year for PLI. With the expensive cost, I find it hard to imagine most structural moonlighters carry PLI. Do they go bare?

Assuming most side work for structurals is residential & homeowners love to sue, not having insurance seems rather risky.

My primary company does not outlaw moonlighting unless it's competitive. I plan on keeping primary & side work completely separate. If I do pursue side work, would discuss with my employer first to confirm they're OK with it.

P.S. I posted this under structural forums yesterday and received several responses. Unfortunately, my thread was deleted before I was able to read them.

RE: Structural Liability Insurance and Moonlighting

I beg your pardon, but what does 'moonlighting' mean, apart that my English is far far from perfect?

Thanks, regards.

'Ability is 10% inspiration and 90% perspiration.'

RE: Structural Liability Insurance and Moonlighting

moonlighting: to hold a second job in addition to a regular one

for your reference, www.webster.com provides a free online English dictionary

RE: Structural Liability Insurance and Moonlighting

I only bill about $5k a year and have been bare.  The real risk is not getting paid and without a contract, it is harder to collect.  EJCDC contract documents can limit your liability to the value of the contract.

Don Phillips

RE: Structural Liability Insurance and Moonlighting


Are you saying the EJCDC documents can limit your liability to the amount you collect in fees? If so, I assume you can be taken to court regardless. I wonder what the chances are that you would have to cough up more than the contract was worth. Which document is it?

RE: Structural Liability Insurance and Moonlighting

You can use any contract that you or your client agree to.  The one I am talking about is the abbreviated form between engineer and owner, E-520.  The base agreement limits the liability to the contract amount or $50,000, whichever is greater.  You could edit it to limit it to the contract amount.

You could still be taken to court for negligence or gross negligence, if you did not exhibit the standard of care customarily practiced by other engineers in your area.  

For instance, forgetting to specify two jack studs for an LVL beam is not something you should be held totally liable for since the owner would have had to pay for the second jack studs.  You may have to pay for some overtime or other costs caused by your mistake, but you may be able to negotiate something with the contractor. Your liability could be limited to the cost of the contract.  Hopefully, you had a good relationship with both contractor and owner where you worked together on field issues and this becomes another field issue.  If the owner wanted you to pay for it, your liability would be limited to the contract amount and the courts would probably uphold that.

However, if the LVL were undersized, and already set, your liability would be greater and could exceed the contract amount.  It could be considered negligence so you are better off settling it - hopefully in the field with the contractor - than hiding behind your contract.  The cost of defending this, even if you win, may not be worth it.

And if the LVL were undersized or improperly undersized,and it failed, gross negligence could be at play in which case, your liability could exceed any limits placed by the contract and possibly exceed that covered by an insurance policy.

Don Phillips

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