OT: liability insurance

R

Robert Sefton

Guest
I'm a consultant/contractor. A new customer is requiring me to carry
commercial general liability coverage, including contractual liability
(errors and omissions). I carried a $1M policy from Hartford for several
years, but let it lapse in '02 after customers quit insisting on it. I
paid $500/yr back then. Any recommendations, and what should I expect to
pay? I'm in California.

Thanks,

Robert
(real email: rsefton@nextstate.com)
 
"Robert Sefton" <rsefton@abc.net> wrote in message
news:buku7v$ibgbo$1@ID-212988.news.uni-berlin.de...
I'm a consultant/contractor. A new customer is requiring me to carry
commercial general liability coverage, including contractual liability
(errors and omissions). I carried a $1M policy from Hartford for several
years, but let it lapse in '02 after customers quit insisting on it. I
paid $500/yr back then. Any recommendations, and what should I expect to
pay? I'm in California.

Thanks,

Robert
(real email: rsefton@nextstate.com)

Robert,
Click to expand...

We've can't get General & E&O from the same carrier, so we split it up. Our
general is about $500/yr, but the E&O is about $6000/yr through the IEEE.
If you find a way to get this type coverage for less, please let me know.

Blake
 
$500/yr sounds like Commercial General Liability, which basically protects
you if a customer hurts himself on your premises. It doesn't generally
provide any coverage for your product, in other words O&E. My O&E runs
about $6000/year, and is through a different insurer than my CGL. There are
relatively few carriers that offer O&E, and you'll likely be locked out of
it for certain products like medical instruments and nuclear controls.

Robert Sefton wrote:

I'm a consultant/contractor. A new customer is requiring me to carry
commercial general liability coverage, including contractual liability
(errors and omissions). I carried a $1M policy from Hartford for several
years, but let it lapse in '02 after customers quit insisting on it. I
paid $500/yr back then. Any recommendations, and what should I expect to
pay? I'm in California.

Thanks,

Robert
(real email: rsefton@nextstate.com)
Click to expand...
--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759
 
"Ray Andraka" <ray@andraka.com> wrote in message
news:400ECC6F.CF29C15D@andraka.com...
$500/yr sounds like Commercial General Liability, which basically
protects
you if a customer hurts himself on your premises. It doesn't
generally
provide any coverage for your product, in other words O&E. My O&E
runs
about $6000/year, and is through a different insurer than my CGL.
There are
relatively few carriers that offer O&E, and you'll likely be locked
out of
it for certain products like medical instruments and nuclear controls.
Click to expand...
Blake, Ray -

Thanks. Obviously I didn't carry the O&E coverage before. I did the
minimum that a customer back then required. The new customer is
specifically asking for O&E (the contract calls it "Contractual
Liability" coverage). Another $6k - sweet. I love spending money on
insurance almost as much as paying taxes.

Robert
 
Thing about O&E is you more or less have to keep it in force once you have
it too. It usually is issued on a claims made basis, so it only protects
you for claims made while the policy is in effect, if you do work while
under the policy, then drop the policy and then the customer sues you after
the policy coverage is gone, it doesn't cover the work even though it was
done while the policy was in effect. THe coverage is expensive, but I
wouldn't want to be without it if a claim was ever made. It's a cost of
doing business, it's tax deductable, and it is a relatively small cost
compared to the taxes, salary, pension, tools & equipment that go with the
territory if you are serious about this business.

Robert Sefton wrote:

"Ray Andraka" <ray@andraka.com> wrote in message
news:400ECC6F.CF29C15D@andraka.com...
$500/yr sounds like Commercial General Liability, which basically
protects
you if a customer hurts himself on your premises. It doesn't
generally
provide any coverage for your product, in other words O&E. My O&E
runs
about $6000/year, and is through a different insurer than my CGL.
There are
relatively few carriers that offer O&E, and you'll likely be locked
out of
it for certain products like medical instruments and nuclear controls.


Blake, Ray -

Thanks. Obviously I didn't carry the O&E coverage before. I did the
minimum that a customer back then required. The new customer is
specifically asking for O&E (the contract calls it "Contractual
Liability" coverage). Another $6k - sweet. I love spending money on
insurance almost as much as paying taxes.

Robert
Click to expand...
--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759
 
Amen!

"Ray Andraka" <ray@andraka.com> wrote in message
news:400F3C92.CFFFB71A@andraka.com...
Thing about O&E is you more or less have to keep it in force once you have
it too. It usually is issued on a claims made basis, so it only protects
you for claims made while the policy is in effect, if you do work while
under the policy, then drop the policy and then the customer sues you
after
the policy coverage is gone, it doesn't cover the work even though it was
done while the policy was in effect. THe coverage is expensive, but I
wouldn't want to be without it if a claim was ever made. It's a cost of
doing business, it's tax deductable, and it is a relatively small cost
compared to the taxes, salary, pension, tools & equipment that go with the
territory if you are serious about this business.

Robert Sefton wrote:

"Ray Andraka" <ray@andraka.com> wrote in message
news:400ECC6F.CF29C15D@andraka.com...
$500/yr sounds like Commercial General Liability, which basically
protects
you if a customer hurts himself on your premises. It doesn't
generally
provide any coverage for your product, in other words O&E. My O&E
runs
about $6000/year, and is through a different insurer than my CGL.
There are
relatively few carriers that offer O&E, and you'll likely be locked
out of
it for certain products like medical instruments and nuclear controls.


Blake, Ray -

Thanks. Obviously I didn't carry the O&E coverage before. I did the
minimum that a customer back then required. The new customer is
specifically asking for O&E (the contract calls it "Contractual
Liability" coverage). Another $6k - sweet. I love spending money on
insurance almost as much as paying taxes.

Robert

--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759
Click to expand...
 
Amen!

"Ray Andraka" <ray@andraka.com> wrote in message
news:400F3C92.CFFFB71A@andraka.com...
Thing about O&E is you more or less have to keep it in force once you have
it too. It usually is issued on a claims made basis, so it only protects
you for claims made while the policy is in effect, if you do work while
under the policy, then drop the policy and then the customer sues you
after
the policy coverage is gone, it doesn't cover the work even though it was
done while the policy was in effect. THe coverage is expensive, but I
wouldn't want to be without it if a claim was ever made. It's a cost of
doing business, it's tax deductable, and it is a relatively small cost
compared to the taxes, salary, pension, tools & equipment that go with the
territory if you are serious about this business.

Robert Sefton wrote:

"Ray Andraka" <ray@andraka.com> wrote in message
news:400ECC6F.CF29C15D@andraka.com...
$500/yr sounds like Commercial General Liability, which basically
protects
you if a customer hurts himself on your premises. It doesn't
generally
provide any coverage for your product, in other words O&E. My O&E
runs
about $6000/year, and is through a different insurer than my CGL.
There are
relatively few carriers that offer O&E, and you'll likely be locked
out of
it for certain products like medical instruments and nuclear controls.


Blake, Ray -

Thanks. Obviously I didn't carry the O&E coverage before. I did the
minimum that a customer back then required. The new customer is
specifically asking for O&E (the contract calls it "Contractual
Liability" coverage). Another $6k - sweet. I love spending money on
insurance almost as much as paying taxes.

Robert

--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759
Click to expand...
 
Hello Ray,

Nice seeing your post. Tell me, 1) what's involved in getting the P.E.
moniker and 2) do you carry product liability?

Blake

"Ray Andraka" <ray@andraka.com> wrote in message
news:400ECC6F.CF29C15D@andraka.com...
$500/yr sounds like Commercial General Liability, which basically protects
you if a customer hurts himself on your premises. It doesn't generally
provide any coverage for your product, in other words O&E. My O&E runs
about $6000/year, and is through a different insurer than my CGL. There
are
relatively few carriers that offer O&E, and you'll likely be locked out of
it for certain products like medical instruments and nuclear controls.

Robert Sefton wrote:

I'm a consultant/contractor. A new customer is requiring me to carry
commercial general liability coverage, including contractual liability
(errors and omissions). I carried a $1M policy from Hartford for several
years, but let it lapse in '02 after customers quit insisting on it. I
paid $500/yr back then. Any recommendations, and what should I expect to
pay? I'm in California.

Thanks,

Robert
(real email: rsefton@nextstate.com)

--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759
Click to expand...
 
"Blake Henry" wrote:

what's involved in getting the P.E. moniker
Click to expand...
In the interest of accuracy (not criticism), "P.E." is not a moniker, which
means "nickname".

"PE" stands for "Professional Engineer". A Google search using that phrase
reveals a world of information on the subject.


--
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Martin Euredjian

To send private email:
0_0_0_0_@pacbell.net
where
"0_0_0_0_" = "martineu"
 
"Martin Euredjian" <0_0_0_0_@pacbell.net> wrote in message news:<aYKPb.14422$si4.11688@newssvr25.news.prodigy.com>...
"Blake Henry" wrote:

what's involved in getting the P.E. moniker

In the interest of accuracy (not criticism), "P.E." is not a moniker, which
means "nickname".

"PE" stands for "Professional Engineer". A Google search using that phrase
reveals a world of information on the subject.
Click to expand...
Gee, and here I was thinking Ray is a Private Eye on the
side ! ;*)

Cheers,
rudi
========================================================
ASICS.ws ::: Solutions for your ASIC/FPGA needs :::
...............::: FPGAs * Full Custom ICs * IP Cores :::
FREE IP Cores -> http://www.asics.ws/ <- FREE EDA Tools
 
The P.E. license is issued by the state where you do business. All the states
prescribe to the standards set by NSPE. Basically, it involves a combination of
experience and sitting for some exams. The most used route is to sit for the
Fundamentals in Engineering exam soon after you graduate from college. When you
pass that exam (also known as the EIT) you are an "engineer in training". In
order to sit for the PE exam, you need to have taken the FE exam within the past
12 years, or have 20 years of experience in your field of engineering (and
someone to vouch for it), plus at least 4 years of engineering experience. The
FE exam is rather grueling, and I don't think I'd want to take it if I wasn't
fresh out of school, simply because it covers such a wide range of engineering
and science topics. It is stuff that if you haven't seen it lately, you'll
probably have trouble finishing the exam in the alloted time. I found the PE
exam to be fairly easy, although it did take some study because it requires some
breadth to your EE background...there are many sections on machines,
transformers, power etc that I hadn't seen in quite some time. You also need
to get references from a number of P.E.s familiar with your work (the number
required varies by state), and depending on the state, some of those may have
to be registered in the state you are applying. I found the hardest part was
finding the references, as there are not that many P.E.s in electronic design
for manufacturing.

Note that in order to offer engineering services to the public (this includes to
other firms), you are required to have a P.E. registered to your firm in most
states. Without it, the state can generally issue you a cease and desist order,
and fine and/or imprison you if you don't comply. This is enforced to varying
degrees in different states. There is an exemption for engineering for
manufacturing, but it only applies to engineers on the company payroll, not to
outside consultants. If you are consulting, you technically need to have a P.E.
or have someone on staff with a P.E.

I carry professional liability, which covers the designs my firm produces.


Blake Henry wrote:

Hello Ray,

Nice seeing your post. Tell me, 1) what's involved in getting the P.E.
moniker and 2) do you carry product liability?

Blake

"Ray Andraka" <ray@andraka.com> wrote in message
news:400ECC6F.CF29C15D@andraka.com...
$500/yr sounds like Commercial General Liability, which basically protects
you if a customer hurts himself on your premises. It doesn't generally
provide any coverage for your product, in other words O&E. My O&E runs
about $6000/year, and is through a different insurer than my CGL. There
are
relatively few carriers that offer O&E, and you'll likely be locked out of
it for certain products like medical instruments and nuclear controls.

Robert Sefton wrote:

I'm a consultant/contractor. A new customer is requiring me to carry
commercial general liability coverage, including contractual liability
(errors and omissions). I carried a $1M policy from Hartford for several
years, but let it lapse in '02 after customers quit insisting on it. I
paid $500/yr back then. Any recommendations, and what should I expect to
pay? I'm in California.

Thanks,

Robert
(real email: rsefton@nextstate.com)

--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759
Click to expand...
--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759
 
You're killing me, Ray! You seem to be an expert on all of the legal
requirements and financial costs of running an engineering services
business the right way. I hope this isn't because you learned the hard
way how to protect yourself. :) Can you provide a bullet list of the
things that must be in place to be in compliance legally and to protect
yourself financially? Business license, P.E. license, CGL and O&E
insurance ... anything else?

Thanks,
Robert

"Ray Andraka" <ray@andraka.com> wrote in message
news:4010074A.C0EC4FDE@andraka.com...
The P.E. license is issued by the state where you do business. All
the states
prescribe to the standards set by NSPE. Basically, it involves a
combination of
experience and sitting for some exams. The most used route is to sit
for the
Fundamentals in Engineering exam soon after you graduate from college.
When you
pass that exam (also known as the EIT) you are an "engineer in
training". In
order to sit for the PE exam, you need to have taken the FE exam
within the past
12 years, or have 20 years of experience in your field of engineering
(and
someone to vouch for it), plus at least 4 years of engineering
experience. The
FE exam is rather grueling, and I don't think I'd want to take it if I
wasn't
fresh out of school, simply because it covers such a wide range of
engineering
and science topics. It is stuff that if you haven't seen it lately,
you'll
probably have trouble finishing the exam in the alloted time. I
found the PE
exam to be fairly easy, although it did take some study because it
requires some
breadth to your EE background...there are many sections on machines,
transformers, power etc that I hadn't seen in quite some time. You
also need
to get references from a number of P.E.s familiar with your work (the
number
required varies by state), and depending on the state, some of those
may have
to be registered in the state you are applying. I found the hardest
part was
finding the references, as there are not that many P.E.s in electronic
design
for manufacturing.

Note that in order to offer engineering services to the public (this
includes to
other firms), you are required to have a P.E. registered to your firm
in most
states. Without it, the state can generally issue you a cease and
desist order,
and fine and/or imprison you if you don't comply. This is enforced to
varying
degrees in different states. There is an exemption for engineering
for
manufacturing, but it only applies to engineers on the company
payroll, not to
outside consultants. If you are consulting, you technically need to
have a P.E.
or have someone on staff with a P.E.

I carry professional liability, which covers the designs my firm
produces.
Click to expand...
 
Robert Sefton wrote:
You're killing me, Ray! You seem to be an expert on all of the legal
requirements and financial costs of running an engineering services
business the right way. I hope this isn't because you learned the hard
way how to protect yourself. :) Can you provide a bullet list of the
things that must be in place to be in compliance legally and to protect
yourself financially? Business license, P.E. license, CGL and O&E
insurance ... anything else?
Click to expand...
I once asked the county and state to tell me all the licences I would
need to run my business. I was told that was not their job, it was up
to me to contact every department in the government to ask if I needed
permits from them!

I expect you could hire yourself out as a resource to inform startups
about all the legal requirements, oh, that's what a lawyer is!
 
Expert? no, my expertise is in engineering. Just somewhat experienced.

I got dinged by the state when I first started out because I didn't have a
P.E. on staff.
Fortunately, they found me right before the deadline for registering for the
spring
exam, and I had already had plans to get it done. I was able to avert
having the
business shut down by sending a copy of my PE application to the state. The
rest was
found out through due diligence, and working with a good accountant and
lawyer to
set up the business.

Incorporation (not necessarily needed, but it does help with some customers
and
avoids a bunch of hassles since customers don't have to provide a 1099)
Registration of the business as an engineering firm (need the PE on staff to
do that)
Worker's comp insurance if you have employees
Tax withholding arrangements with all states you have employees in
Business ID number
All the piciune tax filings.
Pension/Retirement plan.


Robert Sefton wrote:

You're killing me, Ray! You seem to be an expert on all of the legal
requirements and financial costs of running an engineering services
business the right way. I hope this isn't because you learned the hard
way how to protect yourself. :) Can you provide a bullet list of the
things that must be in place to be in compliance legally and to protect
yourself financially? Business license, P.E. license, CGL and O&E
insurance ... anything else?

Thanks,
Robert

"Ray Andraka" <ray@andraka.com> wrote in message
news:4010074A.C0EC4FDE@andraka.com...
The P.E. license is issued by the state where you do business. All
the states
prescribe to the standards set by NSPE. Basically, it involves a
combination of
experience and sitting for some exams. The most used route is to sit
for the
Fundamentals in Engineering exam soon after you graduate from college.
When you
pass that exam (also known as the EIT) you are an "engineer in
training". In
order to sit for the PE exam, you need to have taken the FE exam
within the past
12 years, or have 20 years of experience in your field of engineering
(and
someone to vouch for it), plus at least 4 years of engineering
experience. The
FE exam is rather grueling, and I don't think I'd want to take it if I
wasn't
fresh out of school, simply because it covers such a wide range of
engineering
and science topics. It is stuff that if you haven't seen it lately,
you'll
probably have trouble finishing the exam in the alloted time. I
found the PE
exam to be fairly easy, although it did take some study because it
requires some
breadth to your EE background...there are many sections on machines,
transformers, power etc that I hadn't seen in quite some time. You
also need
to get references from a number of P.E.s familiar with your work (the
number
required varies by state), and depending on the state, some of those
may have
to be registered in the state you are applying. I found the hardest
part was
finding the references, as there are not that many P.E.s in electronic
design
for manufacturing.

Note that in order to offer engineering services to the public (this
includes to
other firms), you are required to have a P.E. registered to your firm
in most
states. Without it, the state can generally issue you a cease and
desist order,
and fine and/or imprison you if you don't comply. This is enforced to
varying
degrees in different states. There is an exemption for engineering
for
manufacturing, but it only applies to engineers on the company
payroll, not to
outside consultants. If you are consulting, you technically need to
have a P.E.
or have someone on staff with a P.E.

I carry professional liability, which covers the designs my firm
produces.
Click to expand...
--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759
 
Registration of the business as an engineering firm (need the PE on staff to
do that)
Click to expand...
many firms including mine thus call themselves " contract product
design " firms and avoid the word engineering just to be safe ...
even tho we have significant industry experience the PE exam requires
a whole lotta studing on mechanical etc.

my question is would this effect E&O insurance ? mmmm
 
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