Cost of E & O insurance

[PhoenixConstruction]

Here's my vote Woody - That was inappropriate for this forum.

[lbuttery]

If anyone finds E&O insurance that can be issued to a non-licensed, non-certified designer please let me know.

Lew

[WendyWelton]

Lew,

Insurer's write policies in different markets. I would call around to some of the larger and/or "name brand" architects and designers. Ask each of them who their agent is and start talking to the agents. It will take some work, as this is such a niche market that you won't find it in the yellow pages.

[lbuttery]

Wendy:

In the past I called a few E&O insurer's and was informed that it was available only to licensed or certified PRO's ???

I'll try your suggestion at the next AIA meeting I attend.

Lew

[alobartn]

My agent has tried to find me E&O with no success. Admittedly, I don't know how hard he tried.

Additionally, I submitted an application with the E&O company officially connected to the National Kitchen and Bath Association, as I'm a certified blah-blah and member and so forth. They turned me down flat, explaining that my gross was too low. I suspect they didn't like that I design additions and entire floor plans. Too different from their business model.

I've been working without insurance, which makes be very nervous and careful, but I cannot continue much longer without heart palpitations. The only reason I'm not freaking out is because I'm my biggest client, and I don't expect to file suit against myself.

Lew, if you find a company willing to consider your case, please let me know.

[Steve C.]

The only reason I'm not freaking out is because I'm my biggest client, and I don't expect to file suit against myself.

You just need a good lawyer

You really should be held liable for your mistakes. If I were you, I wouldn't let myself get away with that.

[perryh]

You just have to form an "LLC" and that business takes the risk unless fraud is involved. This does mean another tax return but your covered. Never be a sole owner as your personal stuff will be up for grabs.

[alobartn]

Perry,
An LLC or corporation doesn't protect one against a suit. It provides a layer, but there have been many cases where that layer has been broken. Take that with a grain of salt and call me in the morning.

Steve,
I should really be more demanding.

[lbuttery]

that layer has been broken

It's called "piercing the veil"

Lew

[WendyWelton]

Perry,

"You just have to form an "LLC" ..." Therein lies the most dangerous advise you can give.

You can protect your personal assets until you're blue in the face. You still have to address any lawsuit that's filed. Whether you did anything wrong or not - you will still need an attorney, who will not be free. If you ignore it, they can get a summary judgement. Just because they can't take your personal property (maybe - the "corporate veil" can be pierced) - they sure can come take or attach your business assets - like your computer, your Chief licences - and they can make it impossible for you to get business credit.

Trust me - I've been there, done that, and I'm still payin' for the (#&%^@) T-Shirt. I had a case fall through the cracks of insurance (idiot broker, newly insured, never should have listened to him...). I've topped the $20k mark in attorney's fees fighting a case with no merit. Oh, and countless hours spread over 2 or 3 years now. Yes, folks, that's me winning. I don't even want to think about such a case if I had actually been at fault.

[Jim Rogers]

Wendy:
When it's done or even now, can't you counter sue for damages of some sort?

[WendyWelton]

In the meantime - if you don't have and/or can't find insurance:

- Only accept work that's well within your competency.

- Be scrupulously honest in all your dealings.

- Do absolutely nothing to do with condos - period. They're the single highest liability type project.

- Don't be afraid to interview your clients and turn down the ones that are a bad idea.

Wendy's top 10 list of bad signs:

1 - Client has unrealistic expectations of what you should provide, how quickly, and for how much. The words "all I need is..." should at least make you ask more questions. It often means "all I want to pay for is..."

2 - Client has already been through 2 or more designers. One is a bad sign - proceed with caution. Two or more - show them the door.

3 - Client has a history of withholding payment for perceived problems with construction. You are no different than a builder. If they'll short him, they'll short you. You don't need a client who considers the final payment optional. (If interviewed correctly, they really will tell you all the gory details - and you want to know).

4 - Owner will be own GC, has a full time job, but only wants a "builder's set". Who do think will be blamed when the trim carpenter fails to exhibit psychic powers?

[WendyWelton]

Jim,

That's a dream that fades very quickly. It's still ongoing. And yes, I have a countersuit. It's more tactical than hopeful. Remember - the lawyers continue to get paid.

[WendyWelton]

Adam,

One more piece of the puzzle. You can work only with a signed contract and have that contract pretty seriously limit your liability. Your attorney will tell you about the laws in your state, but if you really can't get insurance, I would look into doing a contract that limits your liability to fees paid. Lawsuits are about money. If the amount they hope to gain is small enough, it won't be worth them paying an attorney.

[jsimanyi]

Wendy -

Thanks for the list. Whether contracting (building) or designing, all you have stated should be foremost in people's minds when considering a client. Hopefully everyone on this forum will take your indications to heart!

Risk assessment is a critical part of selling anything.

John S.

P.S. I'm still waiting to see the other six in your top ten.