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insurance question for contract work

insurance question for contract work

insurance question for contract work

Well I just got laid-off again.  Lack of overall civil site work and some non or late paying clients at issue.  I was actively working on a few projects that are not finished and I was the only civil guy left.  They have said they would like me to work on the remaining projects on a contractual basis but this just happened Friday so it was kind of spur of the moment.

Since I am no longer employed there I wouldn't be covered by their insurance if I worked on a contract basis.  This is all new to me.  What do I need to do to make sure that my back side is covered?  Is there more than one option?

Any other advice?


RE: insurance question for contract work

Have the company name you as an additional insured on their policy or get your own insurance.  In addition, have them indemnify you for any and all claims, including negligence.

I hope you will be charging them more on a contract basis than they were paying you in salary.  Since you are in the SE USA, I would suggest at least 2.5 times your salary for your rate.  They have likely been charging their client 3 to 4 times your salary, so with you charging them 2.5 times salary they can still make a little money to cover insurance, etc.

RE: insurance question for contract work

What area are you from?

I would do your own insurance and charge the client at min $100 an hour with a good estimate on how many hours they will need you.

If you are from Southern California let me know.

Civil Development Group, LLC
Los Angeles Civil Engineering specializing in Hillside Grading

RE: insurance question for contract work

I'm in east tennessee.  Can you be a little more specific on insurance information?

RE: insurance question for contract work

Hey Sam, are you going to be sealing your work?  I've used some subs in my company (1099s) and they do not seal their work. I direct and supervise the work and put my seal on the paper.  That way, I'm on the hook with insurance, and the subcontractor is not.  The hourly rate for the subcontractor reflects the "no risk" situation.  

Robert Billings

RE: insurance question for contract work

I was the last licensed civil there so I would be sealing my work as there is no one else qualified.

RE: insurance question for contract work

Sam...assuming the firm has a professional liability insurance policy (under which you have been covered), they can add you as an additional insured....they only have to call the agent to get this done...usually no charge for it either.  If they are unwilling to do this, you'll have to get your own Prof. Liab. insurance.  It will cost at least $5000 for your first year's insurance, even for a $500k policy.  It will then be based on actual gross fees you generate.

Contact Admiral Insurance in Atlanta.  They provide prof. liab. insurance and their rates are pretty good.

In any case, make sure you have a contract with your former employer and make sure that they indemnify you for any and all claims and make sure it is not a mutual indemnity...one way only in this case (it's called a broad form indemnity....you wouldn't want to sign one against you, but if you can get them to sign one to your advantage, that's OK)

Make sure it has a limitation of liability clause and make sure you cover who owns the documents...you or them.

Spell out the deliverables and be sure they can't force you to do something illegal or unethical, just because they control the contract strings.

I have attached a booklet on contract review that you might find helpful.


RE: insurance question for contract work

Thanks for the info Ron.  

Yes it was a full services firm in-house prior to dismantling the civil department and they should have all the proper insurance.  They have in the past tried to get me to stamp our structural EITs work so they know I won't do that.

RE: insurance question for contract work

If they no longer have a civil PE on staff, are they still legal to do the work?

Peter Stockhausen
Senior Design Analyst (Checker)
Infotech Aerospace Services

RE: insurance question for contract work

Peter makes a good point.  If they do not have a qualified engineer to act as their licensing agent, they cannot legitimately hold a state license to practice as a company...you might want to check into that.  It could be a decision maker for you (they might want to reconsider letting you go).


RE: insurance question for contract work

Well I got my first call from my former employer today and of course they want me to come in a fix a few things and stamp something.  In a rush but with no agreement in place or even beginning negotiations.  

I did mention I couldn't do anything that I was going to stamp without insurance and that they would need to add me as an additional insured on their policy.  

Do I need to get something from the insurance company on their official letter head stating that I am included as an additional insured?

On a brighter note I did find a local civil job advertised that appears to be a good suit for me and the human resources has forwarded my resume on to the powers that be.

I can't take another 10.5 month layoff and I'm going to hard ball my former employer if necessary as I am in control now.

Thanks to everyone for the advice above and anyone else feel free to chime in if you would like.

RE: insurance question for contract work

Sam...request a Certificate of Insurance from your former employer showing you as an additional named insured.  The Certificate should come directly from the agent and it should be addressed to you.

RE: insurance question for contract work

Good Luck Sam!!!

Robert Billings

RE: insurance question for contract work


Rather than working for your former employer on a contract (1099) basis, why not just work for them as a part-time-as-needed employee?  They would have you on payroll as they always have and you would be a W2 employee and covered by their insurance as you always have been.  You can negotiate a project fee with them when work comes up.  

I've done this in the past with employees and it works really well for both sides.  


Pete Madson

RE: insurance question for contract work

Sam -

Ask for a retainer up front.  If your previous firm has trouble with their clients paying them as you stated, i would worry that you might not get paid for your work, so get some up front.

As far as insurance, make sure you get a copy of a certificate with you as an additional insurured for each project they want you to work on.  

What about after you seal these projects?  Will they keep you on to answer RFI's or changes?  Get something in writing from them on the intent on how this will be handled, since your name will be on the plans.  


RE: insurance question for contract work


They had one part-time employ after they closed a near by city's office a year or so ago.  I'm not sure of his status currently but I don't think he is with the company anymore.  The decision was made that my position had to be eliminated and the paper work is filed so I didn't have a say.


Thanks for the info regarding insurance info on an individual project basis and getting a retainer up front

RE: insurance question for contract work

I have a question regarding a clause that my former employer indemnify me in the contract and additionally insured status just for personal clarification?

If they indemnify me in the contract why would I need to be listed as an additional insured?  Protection from a third party (their client or contractor)?  

Is the indemnification clause soley needed so they won't be able to sue me themselves?

Thanks everyone

RE: insurance question for contract work

The indemnity clause is to protect you from third party claims.  The additional insured is to do the same plus protect you from them...they wouldn't consider a lawsuit against you if their insurance company was protecting you. Both are good because indemnity clauses can be stricken and separated from the contract...but the insurance is still there.

RE: insurance question for contract work

thanks Ron  

RE: insurance question for contract work

Their first offer was four 1.4 times my former salary with no mention of insurance.  That doesn't seem exactly fair does it?  I don't think that would cover my increase in expenses due to insurance and taxes that I'll have to pay now.

My dad is an accountant so he was able to explain the tax information to me.

Thanks to everyone for their advice so I'm not going to let them make that much money off of me if I'm no longer employeed there.

I explained that to them in a email I sent.

They need me and it will cost them.

RE: insurance question for contract work

Sam...way to go.  Good attitude.  I agree...don't let them take advantage of you...after all, they let you go now they need you.  Stick to your guns!!


RE: insurance question for contract work

Here's the APESMA guidelines for levels, as you can see they are completely different than that document


and the associated pay rates

http://www.apesma.asn.au/adviceonline/remuneration/market_rates.asp which you could use to scale the hourly rates.



Greg Locock

New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies  http://eng-tips.com/market.cfm?

RE: insurance question for contract work


what software opens that document?


Thanks for the info, I'm glad I've had a few beers because I've been screwed for awhile now and knew it but not had much choice while I learned.  What is the currency difference between here and there?  Nevermind I'll google later.  I always wanted to go to Australia.

First job went 9 years surveying, inspecting, and general civil/site.  Classifications disapeared under the rug along with pay scales.  They crept up one day when a new guy (department head) came in and let me see them.  Oops!

Got licensed switched jobs for a 25% raise in one year.  Oh well, I'm probably snake bit now.  But I'd like to get that SOB that's laid me off twice fired now.

Definitely snake bit now.  Oh well, can't get much worse.

Ron, your the man, thanks so much for your advice.

I'm just a dumb country boy and thats what I want most people to think because it is easier to pick the users and players out that way.

Is there anybody out there that is not a user or player, because I'm at a great disadvantage?

Maybe too many beers?


RE: insurance question for contract work

Greg -

The documenet is more for the first page in showing how to reduce the number of hours in a year by accounting for no holidays, etc.  

What I would recommend to Sam is to take what was his salary hourly rate, and factor it up as shown.  This would at least establish some sort of equivalency.

Sam.  -  You need the latest version of Word to open it.  If i need to save to another version let me know.   

RE: insurance question for contract work


if you could save it as a pdf and re-post that would be great.

as for my former employer, they are making other arrangements.

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