Personal E+O Insurance Covering My Main Employeer

Question

Personal E+O Insurance Covering My Main Employeer

(OP)

28 Feb 17 19:25

Before anyone asks; yes, I'm 100% going to talk to a lawyer and/or insurance agent about this to be sure. I want to see what your thoughts are before going into this so I understand how practical/common this is.

Currently my employer pays for E+O insurance while I do the engineering for the company. However, as we're a precaster and not an engineering firm I do occasionally get offers for some moonlighting jobs and my employer has said they have no issues with this. I've yet to take any moonlighting jobs that required stamping drawings but the work is clearly there.

I may have the opportunity coming up to work with a local civil engineering firm to provide structural engineering design work for the occasional job when their workload doesn't permit. If I were to do this I'd like to bring the E+O insurance under my own name and see if my current employer can provide a bump in my pay to roughly cover the savings of them not having to pay for the E+O insurance.

Is it legally feasible to have the E+O insurance under my name or the name of a separate consulting firm I were to create while still covering the work I do for my current employer? I assume this would open me up for more risk which I find acceptable. Would you think it might open my employer up for more risk? Is this something people have done before?

Professional Engineer (ME, NH, MA) Structural Engineer (IL)
American Concrete Industries
https://www.facebook.com/AmericanConcrete/

Terratek (Geotechnical) · Answer 1 · 2017-02-28 19:32:44

Insurers will generally insure you based on the amount of revenue you generate. You would probably have to change from employee to independent contractor in order for your day-job work to count toward your insurable revenue. You might also have a challenge getting insured on part time work, in and of itself, because the revenues may be too small for an insurance company to be interested in covering. This is information I have uncovered while investigating insurance policies for geotech work. I suppose it would be different, yet similar, for structural work.

canwesteng (Structural) · Answer 2 · 2017-02-28 19:58:43

Can you get insurance only for the moonlighting, like insurance for 15k in fees? Seems more honest and less of a hassle.

TehMightyEngineer (Structural) · Answer 3 · 2017-02-28 20:06:51

Quote (Terratek)
You would probably have to change from employee to independent contractor in order for your day-job work to count toward your insurable revenue.

I was afraid this would be the case. Maybe a few more years down the road I might consider this, but for right now I'd like to continue being an employee rather than split off as contractor.

Quote (canwesteng)
Can you get insurance only for the moonlighting, like insurance for 15k in fees? Seems more honest and less of a hassle.

Somehow this never occurred to me; I always pictured in my head $10k in E+O fees for $15-20k in moonlighting work and that obviously isn't worth it. However, if the fees are proportional to the amount of work performed (which would make sense as the risk exposure is limited as well) then that would clearly be the way to go. Anyone know if this is possible?

Professional Engineer (ME, NH, MA) Structural Engineer (IL)
American Concrete Industries
https://www.facebook.com/AmericanConcrete/

TehMightyEngineer (Structural) · Answer 4 · 2017-02-28 20:24:10

Well, I'll be. Should have done a better search before posting; canwesteng's post got me searching for part-time E+O insurance. First thing that comes up is someone in the exact same situation (precast engineer) with the exact same issue. http://www.eng-tips.com/viewthread.cfm?qid=322154

I suppose that thread answers most of my questions. Anyone see anything else to add?

Professional Engineer (ME, NH, MA) Structural Engineer (IL)
American Concrete Industries
https://www.facebook.com/AmericanConcrete/

jdgengineer (Structural) · Answer 5 · 2017-02-28 23:47:18

As an employer I would not personally allow moonlighting, but that is obviously not the question at heart. If you use company resources (computer, software licenses, calculation templates, etc.) the employer could potentially be liable (or so I have been told). Therefore, we have a strict "no moonlighting" policy in our office.

However, if you employer is willing to allow it, I would contact an insurance broker and they can likely provide coverage for you for moonlighting. I don't believe it's that unusual of a request.

TehMightyEngineer (Structural) · Answer 6 · 2017-03-01 00:16:21

About the only thing I'd use would be a software license or engineering reference; calculation templates and my computer and phone would be kept separate, but I would be completely forthcoming about my intent to my employer and make sure they approved (they've approved in the past so I don't see this changing). It probably helps that my employer is in an entirely different field as an engineering firm so dragging them into a lawsuit seems like quite a stretch.

I definitely encourage any advice on this kind of setup beyond just E&O insurance, obviously this is not something I am exceptionally experienced in. The linked thread gave a lot of good advice on being clear to the parties I may moonlight for that it is a side job and my main job takes priority.

Professional Engineer (ME, NH, MA) Structural Engineer (IL)
American Concrete Industries
https://www.facebook.com/AmericanConcrete/

jdgengineer (Structural) · Answer 7 · 2017-03-01 00:45:14

Obviously, not a definitive source but is generally following what I've been told and why we do not personally allow moonlighting. It sounds like your employer is ok with it so not an issue, but this is why we do not.

https://www.ejcdc.org/wp-content/uploads/2014/10/X...

jdgengineer (Structural) · Answer 8 · 2017-03-01 03:01:58

I am also no expert on the intricacies of liability insurance but I would think there would be reasons why your employer would want to keep the E/O insurance in their name and why you would not want the E/O insurance in your name for company projects. If I were in your shoes I'd want to keep the main insurance with your company and buy supplemental moonlighting insurance as necessary.

TehMightyEngineer (Structural) · Answer 9 · 2017-03-01 12:37:14

Quote (jdengineer)
Obviously, not a definitive source but is generally following what I've been told and why we do not personally allow moonlighting. It sounds like your employer is ok with it so not an issue, but this is why we do not.

Great info, thankfully most of those don't apply to me where my employer isn't in the engineering business. My overall plan is to actually set up my moonlighting as a true company, probably an LLC or something similar. As I wont be competing with my employer and will be using 99% my own resources it should be very easy to legally distinguish myself from my employer. I think the biggest concern will be the time. I'll have to setup the situation so that my work phone at my employer is off limits to anyone I moonlight for, probably get a dedicated line, email, etc. at my home which I use.

I currently do a side-job teaching a structural engineering review course which is a big time suck. I'd probably drop this in favor of the moonlighting but if I can manage this I believe I can manage some moonlighting (assuming it makes financial sense). Finally, I'm not trying to undercut anyone and would charge a full rate for my local and ensure that I was able to provide services commensurate with that fee.

Quote (jdengineer)
If I were in your shoes I'd want to keep the main insurance with your company and buy supplemental moonlighting insurance as necessary.

For sure, I was willing to accept some potential additional liability my way but that was because I wasn't aware getting a "moonlight E&O policy" was an option. Given that it is I agree that would make sense from a risk standpoint.

Professional Engineer (ME, NH, MA) Structural Engineer (IL)
American Concrete Industries
https://www.facebook.com/AmericanConcrete/

jdgengineer (Structural) · Answer 10 · 2017-03-01 14:32:50

Sounds like you are taking some smart steps which most moonlighters do not do. I know you mentioned talking to a lawyer which I think is a good idea depending on how serious you are about your side business. It would be good to understand risks and proper setup. Which sounds like you are trying to do. Wish you luck in your endeavors.

Quote (tehmightyengineer)
About the only thing I'd use would be a software license

what's your plan for this? Won't the printouts say "licensed to precast company XYZ"? This is the type of stuff I would be concerned that your company gets dragged down in the event of a lawsuit. You are also likely violating the terms of use by the software provider. Is your plan to simply white out this part of the printout (obviously not very ethical)?

TehMightyEngineer (Structural) · Answer 11 · 2017-03-01 14:52:07

Quote (jdengineer)
what's your plan for this? Won't the printouts say "licensed to precast company XYZ"? This is the type of stuff I would be concerned that your company gets dragged down in the event of a lawsuit. You are also likely violating the terms of use by the software provider. Is your plan to simply white out this part of the printout (obviously not very ethical)?

The software I'll be using does not label the report licensed to "XYZ" thankfully, as that was also my concern. It should be very easy to ensure that any reports generated by the software do not lead back to my employer.

I plan to utilize the software with the permission of my company. Essentially arrange it that they "loan" me the software license. Might be a little bit of a grey area legally with the software license. I plan to look into this more to ensure it's not a violation. The software utilizes a hard lock so I'm not using more licenses than purchased, but again I agree it's a bit of a legal grey area. Using the software is about the biggest issue I see potentially dragging my employer into liability and I'll explain as much to the owners. If this takes off then I may consider buying the software license from my employer.

Professional Engineer (ME, NH, MA) Structural Engineer (IL)
American Concrete Industries
https://www.facebook.com/AmericanConcrete/

TehMightyEngineer (Structural) · Answer 12 · 2017-03-01 19:30:40

Hah, another interesting twist! I talked with my boss after lunch and he had an interesting suggestion that I hadn't considered. His suggestion was what if I brought it under the umbrella of my employer as a separate department that offered general structural engineering. I would essentially work for commission where they take a part of the profit for assuming the liability and providing the software but now I would not have to get separate E&O insurance, worry about any additional liability issues, and can even use my work hours on projects as long as they didn't slow down our precast production projects.

Still got to put some thought into this and consult a lawyer but I think this makes the situation pretty much win-win.

Professional Engineer (ME, NH, MA) Structural Engineer (IL)
American Concrete Industries
https://www.facebook.com/AmericanConcrete/

IRstuff (Aerospace) · Answer 13 · 2017-03-01 20:19:58

Sounds like a definite win-win for you. I'm surprised your company would go for that. Their profits have to at least cover the premiums and any aggravation from any lawsuits; I can't see how a part-time gig from you would cover all of that.

TTFN (ta ta for now)
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Ingenuity (Structural) · Answer 14 · 2017-03-01 23:55:33

Quote (TME)
His suggestion was what if I brought it under the umbrella of my employer as a separate department that offered general structural engineering

Under such a scenario, does your State Board then require require some form of business registration with the Board in order for the company to practice engineering in the state, and does that person who is is 'responsible charge' need to be a principal of the business?

Something for you and the business owner to think about.

TehMightyEngineer (Structural) · Answer 15 · 2017-03-02 12:46:58

Quote (Ingenuity)
does that person who is is 'responsible charge' need to be a principal of the business?

Great point Ingenuity. I could definitely see work in NH being part of this and they do require a firm to register but for NH I wouldn't need to be a principle, only an associate designated in responsible charge.

Quote (IRstuff)
I can't see how a part-time gig from you would cover all of that.

Knowing the owners of the company they might just do this as a favor for me even if it wasn't the best setup for risk vs reward.

Professional Engineer (ME, NH, MA) Structural Engineer (IL)
American Concrete Industries
https://www.facebook.com/AmericanConcrete/

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