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Just getting started...insurance questions...

Just getting started...insurance questions...

Just getting started...insurance questions...

(OP)
I live in NY and would like to start doing some engineering work myself.  Initially I plan on doing perc/deep hole tests.  I recieved a quote for insurance and the price was $478 for general liability ($1 million coverage) and $5,151 for professional liability. Do I really need the professional insurance for doing perc/deep hole tests?  I don't think I will have many jobs for the first few years so I would be losing a bunch of money if I paid close to $6,000 a year for insurance.

Eventually I plan on gettin into site plans and possible small residential/house/garage projects and then I would obviously need the professional insurance.

Thanks.

RE: Just getting started...insurance questions...

I went through this same issue.  I was told you generally get insurance about 2 years into a new business.  We had to get ours 6 months in as we had a big project that required the $1million Professional Coverage.  We also lost another job because we didn't have insurance.  I think the insurance is a double edge sword when you are starting out, since it's so expensive when you aren't making very much money to begin with.

Civil Development Group, LLC
Los Angeles Civil Engineering specializing in Hillside Grading
http://civildevelopmentgroup.com
http://civildevelopmentgroup.com/blog

RE: Just getting started...insurance questions...

And why would you assume that you can start a business without any investment?

If you are not confident of recouping $6,000/yr in expenses (this is not the only expense), perhaps you want to reconsider your plans.

This topic has been discussed several times in this forum, do a search.

Rafiq Bulsara
http://www.srengineersct.com

RE: Just getting started...insurance questions...

(OP)
The reason I am not confident in recouping $6,000/yr in expenses is because this would be a side job.  I currently work 40 hours a week for a company that produces stone, asphalt and concrete.  This side work is not a conflict of interest with my current job as my current company does not do engineering work.

I expect their to be some investment when starting a company but it is easy for me to see that a $5,151 professional liability insurance cost would make it impossible for me to get a business going as a side job.

RE: Just getting started...insurance questions...

Lower your aspirations for insurance coverage.  I have a competitor in my area of practice (forensics) that has 1/2 the insurance I have, and they are successful.  Go to 250,000 or 500,000 and see what your premiums would be.  If you're confident in your ability, raise your deductible.

RE: Just getting started...insurance questions...

I would suggest not doing this as a side job unless you already have some kind of decent sized job lined up, that will easily allow you to transition into quitting your normal job.

You should also find out somehow if moonlighting is okay.  Out here in SoCal that kind of stuff follows you pretty much forever.

Civil Development Group, LLC
Los Angeles Civil Engineering specializing in Hillside Grading
http://civildevelopmentgroup.com
http://civildevelopmentgroup.com/blog

RE: Just getting started...insurance questions...

(OP)
I have already talked to my boss and the company about me moonlighting and they have no problem with it as the side stuff I will be doing is totally different from what my company does.  I am also not planning on quitting my current job so I don't need to have a decent sized job lined up.  Maybe in the future I will quit my job and work for myself but in the meantime I am just looking to start slowly and make a little money.

Thanks for the input.   

RE: Just getting started...insurance questions...

I'm in the same boat, but I definitely plan on getting insurance after discussing it here (ad nauseum) and doing some of my own research.

My quote was ~$3,300 for 250k in coverage, and about $5,000 for 1mil in coverage.  Those are industry minimums, and don't start to go up until you get into the 250,000+ revenue area.

I'm going to proceed with the 250k level at 3300/yr premium and see how things go.   

RE: Just getting started...insurance questions...

For what it's worth, I work for a mid size civil engineering firm.  We require subconsultants to carry $1 miilion in professional liability.
This subcontracted work would be mostly with geotechnical engineers and surveyors.

RE: Just getting started...insurance questions...

Insurance is a double-edged sword. It comes with a duty to defend - so if some idiot says "You messed up, pay me $25,000 or I'll sue you." your insurance company will defend you (which will cool the idiot's jets unless you really did mess up). On the other hand, insurance makes you a target since there's something there to go after. If you have no assets, no one will sue you (1/3 of nothing is nothing so they won't be able to find an attorney). You might want to talk to an attorney about your assets and what could be at risk - I've known people who've put all their assets in their wife's name before striking out on their own - the laws vary from state to state, do your own diligence.

RE: Just getting started...insurance questions...

If all assets are in your wife's name, isn't that the same as being in your name should a lawsuit rear its ugly head?  As far as I'm aware, the law does not distinguish ownership when you're married, particularly when it comes to paying debts!

Dan - Owner
http://www.Hi-TecDesigns.com

RE: Just getting started...insurance questions...

(OP)
I am talking to a lawyer on Friday about all of this.  I will let you know what his thoughts are.  Thanks for all the replies.

RE: Just getting started...insurance questions...

So, what were his thoughts?

Bumping for interest.

RE: Just getting started...insurance questions...

Be very wary of putting everything in your wife's name for liability reasons.
  I did that with my aircraft repair business.
 In 1989 my wife said " I am selling everything up and moving to California, you can come too if you want to."

B.E.
Now in California.  

RE: Just getting started...insurance questions...

(OP)
Sorry for not updating everyone.  The lawyer said it was a tough call as he didn't see much liabilitiy in perc/deep hole tests.  However, he recommended that I try and get at least $100,000 coverage.

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