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Re: Tom Schaniel's posting of 5 March 1997 at 16:16

I have been in practice (in Arizona) for 31 years and carried E & O
insurance for the first 3 years.  My premium for the 4th year was
going to double, so I decided to sit down and *read* my policy.  I
found that:

1. If I did not require any consultants that I use to carry E & O
insurance, I was NOT COVERED.

2. The insurance company would select the attorney to defend me.
Therefore, the insurance company would be the lawyer's client, not
me.  Since it is an attorney's duty to represent the best interests
of the *client* it would behoove him/her to get a settlement within
the deductible.  If I wanted to have my own attorney defend me, the
insurance company would withdraw and I would be responsible for my
attorney's fees and any awards against me.  In other words, I was

3. If the insurance company negotiated a settlement and I did not
agree to it, the insurance company and their attorney would withdraw
and I would be responsible for defending the case and any awards
made against me.  In other words, I was NOT COVERED.

Needless to say, I did not renew my policy and in the intervening 28
years, I have not had one indication that a claim against me was
being contemplated.

E & O insurance *does* attract lawsuits.  As much as we would like
to think otherwise, lawyers are not dumb.  When they take a case on
a contingency fee basis, they want to know that there is money
available for their fee.

Example 1.  I was contacted by an attorney representing a person
injured in a construction accident who wanted to know if I would be
interested in doing an investigation.  To make sure that there was
no conflict of interest involved, I inquired about who the architect
and structural engineer was for the project.  He quickly told me who the
structural engineer was, but hemmed and hawed about who the architect
was, finally saying, "We dropped the architect from the lawsuit ---
he had no insurance."  (I never heard from the lawyer again.)

Example 2.  I was retained by an insurance company to investigate wind
damage in an apartment complex where wind toppled 13 wood frame and
stucco chimneys.  The insurance company filed suit against the
architectural firm to recoup their loss, but dropped the lawsuit when
they learned that one of the three partners was dead, another had
filed bankruptcy and the firm had no insurance.

Example 3.  At a SEAOA annual convention a couple of years ago, there
was a presentation on E & O insurance with the presentation being
given jointly by a representative of an insurance agency and an
attorney who was used to defend firms insured by the insurance
company.  To the chagrin of the insurance agency representative, the
lawyer essentially said that if you are a small firm, you are not
independently wealthy, and you don't have E & O insurance, you are not
likely to be sued.  However, he said, if you do have E & O insurance,
you *will* be named in lawsuits.

With regard to some of the *low cost* E & O insurance currently
available, one policy that I am aware of is the policy available
through ASCE.  Because the premiums were so low, I called and got a
sample policy.  The policy requires *you* to defend the lawsuit up to
the limits of the deductible, *then* the insurance company will look
at the lawsuit and decide whether they will take over defense.  **This
is an insurance policy?** (Get the sample policy and read it if you
don't believe me.)

With regard to general liability insurance, I have not had any
problems with getting and keeping one.  I think that I have used
only three insurance companies in the past 31 years.  The general
liability policy does, of course, exclude coverage for architects
and engineers professional liability.

A. Roger Turk, P.E. (Structural)
A. R. Turk, Consulting Engineer
Tucson, Arizona

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Subject: Insurance
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