Need a book? Engineering books recommendations...

Return to index: [Subject] [Thread] [Date] [Author]

RE: E/O Insurance

[Subject Prev][Subject Next][Thread Prev][Thread Next]
Roger-

The reason I carry insurance is for none of the (practical) reasons you
stated below.

It's because my customers require it of me, plain and simple.
Apparently, the basis of their insurance is that their consultants are
insured. If I can't provide a certificate, then they can't use me. Well,
they can, but they don't want to. If the percentage of their consulting
work goes over a specific minimum (don't know/don't care what that
percentage is), then their rates go up. So, this has NOTHING to do with
the realities of coverage (claims made, etc.) but realities of
contracts.

Regards,

Bill Allen
2002 R1150RT
San Juan Capistrano, CA
V/F (949) 248-8588

:-----Original Message-----
:From: Roger Turk [mailto:73527.1356(--nospam--at)compuserve.com]
:Sent: Friday, November 21, 2003 10:34 AM
:To: SEAOC Listservice
:Subject: Re: E/O Insurance
:
:Paul,
:
:Apologies for the long response.
:
:Insurance companies will frequently refer to "underwriting losses" when
:they
:increase rates.  "Underwriting losses" refer to payments made by the
:company
:being greater than the premiums collected, and conveniently omits
income
:received from investments.
:
:You ask some very good questions about "going bare."  If a client
requires
:E&O insurance, I try to find out what the client expects the E&O
insurance
:to
:do as far as they are concerned.  Usually, they expect to be
"protected" by
:the insurance, however, they are generally not aware that E&O insurance
is
:a
:"claims made" insurance policy, as opposed to an "occurrence" policy,
i.e.,
:that the policy must be in effect when the claim is made, not just when
the
:design is done.  If the client still insists on E&O coverage, I offer
them
:that I will try to obtain "project coverage" for a specified number of
:years,
:which would really protect the client, but that would be a reimbursable
:cost
:to the client as it applies to his/her project only.  I have yet had a
:client
:take me up on the project coverage, maybe it is because some years ago
:Arizona rescinded the "deep pocket" liability provisions of the law and
:made
:parties to a lawsuit only responsible for *their* portion of any award.
:
:So, what protection does E&O insurance provide to either the insured,
:client
:or public?  In my opinion:
:
:None, if you have it when the project is designed, and don't have it
when
:the
:claim is made.
:
:None, if you have it when the claim is made, but the policy requires
the
:insurance be continuously in force from when the design is performed to
:when
:the claim is made.
:
:None, if the attorney selected by the insurance company offers to
settle
:(usually within the deductible) and you don't agree.
:
:None, if your present insurance company decides to stop offering E&O
:insurance and your new company will not cover work designed under
previous
:policies.
:
:None, if you want to be represented by an attorney of your choice,
instead
:of
:an attorney selected by the insurance company.
:
:As a side note, I met with an attorney for a large corporate client
:concerning a project in which some failures were occurring.  The
attorney
:kept asking me if the structural engineer for the project made a
mistake in
:his calculations.  My response was that the calculations were correct,
but
:the wrong criteria was used.  In the end, the attorney remarked that
they
:could not sue the engineer if a mistake had been made.  Whether it was
:because of pride or advice, the engineer refused to admit that he had
made
:a
:mistake and ended up being sued.
:
:A. Roger Turk, P.E.(Structural)
:Tucson, Arizona
:
:Paul Feather wrote:
:
:. > Hi Roger,
:
:. > I do not know if rates will climb to the levels you indicate, but I
can
:. > say that rates have been increasing.  Our rates have increased in
:. > disproportion to our revenue increase for the past two years. The
first
:. > year the agents were singing some song and dance number and trying
to
:. > blame the increase on Sept. 11., rather than the poor performance
of
:the
:. > Markets. At least this past year the increases were not accompanied
by
:. > the lame excuses.
:
:. > As a side note, I know a lot of you "go bare" without E/O
insurance.  I
:am
:. > note sure how you accomplish that, we could not perform the
projects we
:do
:. > without E/O insurance.  Do you limit your projects to those without
E/O
:. > insurance requirements?  From my perspective, E/O insurance is one
of
:. > those unavoidable expenses in a captured market. I can complain
when
:the
:. > rates go up, but there are not a lot of options beyond that.
:
:. > Paul Feather PE, SE
:. > pfeather(--nospam--at)SE-Solutions.net
:. > www.SE-Solutions.net
:
:******* ****** ******* ******** ******* ******* ******* ***
:*   Read list FAQ at: http://www.seaint.org/list_FAQ.asp
:*
:*   This email was sent to you via Structural Engineers
:*   Association of Southern California (SEAOSC) server. To
:*   subscribe (no fee) or UnSubscribe, please go to:
:*
:*   http://www.seaint.org/sealist1.asp
:*
:*   Questions to seaint-ad(--nospam--at)seaint.org. Remember, any email you
:*   send to the list is public domain and may be re-posted
:*   without your permission. Make sure you visit our web
:*   site at: http://www.seaint.org
:******* ****** ****** ****** ******* ****** ****** ********



******* ****** ******* ******** ******* ******* ******* ***
*   Read list FAQ at: http://www.seaint.org/list_FAQ.asp
* 
*   This email was sent to you via Structural Engineers 
*   Association of Southern California (SEAOSC) server. To 
*   subscribe (no fee) or UnSubscribe, please go to:
*
*   http://www.seaint.org/sealist1.asp
*
*   Questions to seaint-ad(--nospam--at)seaint.org. Remember, any email you 
*   send to the list is public domain and may be re-posted 
*   without your permission. Make sure you visit our web 
*   site at: http://www.seaint.org 
******* ****** ****** ****** ******* ****** ****** ********