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Roger Turk wrote:
> 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.

Personally, I believe that all of your consultants SHOULD be covered.
More importantly, your architectural clients should be as well. The
potential problems are obvious if you have E&O and your architectural
client does not. Also, I think if everyone was covered, and not
"excessively" covered, then it would discourage attys from looking for
the "deep pockets".
> 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

I cannot understand why you wouldn't want to use the insurance co's

> 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.

See my first comment above.

> 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.

But who's at risk if you are sued? Can you sue the atty at that annual

> 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.)

Of course, my insurance broker has warned me against low cost insurance
companies such as the one through ASCE. She has reminded me several
about the service side of the policy. I've had the same policy for about
five years and I am very happy with the service.
> 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 lot of these comments have been interesting. So, I forwarded them to
my broker to find out what her reaction was to some of these. I will
back when she responds.

Bill Allen

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