Cost of E & O insurance

[sutcac]

Wendy,

Thank for sharing your seemingly limitless supply of would-do-well-to-learn-from experiences. I have learned a great deal and am a big "fan" for lack of a better word.

But I have to get something off my chest because I've seen it so many times now-

advise- verb
advice- noun

Please don't hate me!

[lbuttery]

"I hereby say a curse upon Wendy's legal antagonists."

Wendy:

Draw4food was giving you sympathy for your legal woes, as all of us do. As in, "whoa, I hope that never happens to me"

Me thinks you read her post too fast ?

Lew

[Draw4Food]

Wendy,

Sorry, I might have responded to the wrong thread on the same topic. I wasn't meaning multi-family in my post, but single family.

It might have sounded like I was making a statement with my post, but it was really a question. I struggle with what to do about liability, and if a disclaimer won't work, I want to know now rather than in court.

So, you can discount the advise of those who've already paid for the lesson.
I greatly value your advice. In fact, it was your good advice that tipped the scales and made me choose CA. A couple years ago, you said something to the effect that I would be so happy with chief I would want to send them brownies. I would have, but I always eat the brownies before they are packaged. So I am a huge fan of yours and I find your post very valuable. Where you said Huh?, I meant it as a lighthearted comment to indicate that I was on your side. My post was not intended to accuse you of being a wet blanket. I am trying to determine whether, as a designer, I am less likely than an architect to draw legal fire.

Allan

[Draw4Food]

Me thinks you read her post too fast ?

I must need to change my nickname or writing style. Everybody thinks I am a girl for some reason.

Thanks Lew, that is what I meant.

Allan

[lbuttery]

Draw4food:

Allan:

sorry about that, some bad memory cell must have kicked

My mistake, but a name does help for each posting

Lew

[Allen42acj]

If you screw up you should be held responsible..
If your screw up has to be fixed,some one will want to get paid for material and labor.
If the shoe was on the other foot how would you feel?

This is not about frivolous lawsuits..

[WendyWelton]

Allan,

Me thinks I totally didn't understand the line I quoted from your post! Many apologies. I think I had also just read something somewhere else that got under my skin - more apologies.

"her"... Hmmm - I could swear there was a Draw4Food here once before, who was a woman. There's an easy way around it. If you go to User CP you can put an automatic signature with your name etc.

Allen,

Yes, absolutely. The problem with certain project types is that the liability can be way way way out of scale with what most non-registrants get paid.

The amounts charged by any business, whether they are the price of a product or fees for service, are also about the Risk/Reward equation.

If you get paid to design 1 unit, built 1, good. Let's say you get $5,000, just for giggles. You make a mistake on a window and they ding you $800 for labor and materials. Yeah, ok. Now multiply that same mistake by 100 units. Uh oh.

Allen,

What to do about liability:

Rule #1 - keep your risk in reasonable relationship to your reward.

Single family house, no insurance - I would include 2 clauses:
1 - limiting liability to fees paid, or whatever your state allows.
2 - a clause clearly limiting your liability to the service provided.

Huh? Yes. If you aren't paid for the time it takes to do a full estimate, you should not be responsible for construction. If you are not paid to review construction weekly, you should not be responsible for verifying that the windows were put in correctly. If you were not paid to do thermal & moisture details...

Without insurance, I wouldn't touch any project where the end users are a whole lot of potential people, unless I got an indemnity clause. Condos, churches, schools, most retail businesses (depends on what you're doing)... I think the legal eagles call all those people potential "third party complainants", who would not be covered by any limits in your contract, 'cause they didn't sign it.

I worked for a firm that got sued because a woman slipped in the water from an overflowing toilet at a retail store we designed. The claim? That we "specified a defective toilet". It was the American Standard that's in half the big box retailers in the country.

Bryce,

Sorry - yes - advice. That bugs me too. I always look at it, ask myself which one, can't remember...

All,

Sorry for going on an on. I guess that when I see posts here that tell me somebody really doesn't know much about this, like this current condo question, I go into Mother Hen mode - getting her chicks ready to cross that big road, where one mistake can be crushing.

[RMorrison]

What to do about liability:

Rule #1 - keep your risk in reasonable relationship to your reward.

Single family house, no insurance - I would include 2 clauses:
1 - limiting liability to fees paid, or whatever your state allows.
2 - a clause clearly limiting your liability to the service provided.

Wendy,

I'm not trying to be argumentative here, but I have struggled with the ethics of this, and I really believe that, while it's certainly a nice thing for the design professional to be able to limit liability to a fee, I'm not sure how ethical it is.

For example, how would you feel about your doctor being able to limit her liability to the fee of the office visit? I don't think many patients would go along with this.

Similarly, if a design professional's screwup causes a client tens of thousands of dollars worth of damage (let's say, a bad siding detail that requires the entire exterior to be redone), or even worse, a detail that causes serious injury, should the design professional be able to hide and say, "Oh, sorry. But my liability is only $2,500. Ha, ha."? Aside from being dubious that a court would uphold such a weaselly limitation of liability, I wonder about someone who wants the rewards but is unwilling to step up to the plate with the responsibility that goes along with it.

It makes me very sad that the risk in this business is so disproportionate to the reward, but I don't think pretending that the risk isn't there, or trying to disclaim one's way out of legitimate responsibility, is appropriate. Maybe an attorney like George could opine.

[lbuttery]

Richard:

I agree with you that who ever signs and submits the permit represents the client and has a ethical responsibility to them to do right.

Some of us drafters work as subs for the builder, who is suppose to review the work product prior to submitting it, thus the limit on liabity for the drafter to the fee charged. We work as temp employees for the builder.

I now have a clause in my "limitation of liability" disclaimer that states that if the builder sends the plans to print and/or submits them for permit then they have been reviewed and found acceptable.

I had a builder who was in a rush, take a draft and send it to print for 9 copies and then the engineer found numerous errors, some ours, most the builders (we inherited 15 pages of the layout, due to illness of the builder). He was then mad for having wasted $200 on the prints. Then he tried to rush again the next two drafts.

I finally got him to realize that he needed to print one copy as
13 x 19 or send PDF to engineer and not print the rest until the engineer signed off.

Lew

[Allen42acj]

Wendy
Thanks..
Just my opinion but multi family=condos should be drawn by the professionals.
Any thing commercial, the rules get to complicated for an average drafter..

People have to take responsibility for what they do.
Blame gets placed on every one else.
The lawyers get a bad reputation on this.
I don't want to draw plans loaded with disclaimers just to cover my butt..

[WendyWelton]

Allen,

I agree - not a bad idea to simply avoid any project where a lot of disclaimers would be needed or where it's too far removed from your core competence.

I do stick by my advice (with a "c"!!!!) to disclaim liability for the portions of a project you were not paid to do. It kind of ***** that in today's world you have to actually state the obvious, but there you have it.

By the way, discussing this type of thing with the client can have other positive impacts. They either mentally put responsibility where it belongs, or they hire you to do that portion - as in, more business. It depends on your individual skills, but a lot of "just drafters" here are quite skilled in estimating or skilled builders who could add real value with paid site visits.

[Allen42acj]

Wendy
I like that advice
Single family house, no insurance - I would include 2 clauses:
1 - limiting liability to fees paid, or whatever your state allows.
2 - a clause clearly limiting your liability to the service provided.

You all ways get me thinking..
I need to make up a list of what they want included in the plan..
Framing layouts
Schedules
So on..
Depending on how good the drawing is or the subs are,site visits are not needed..
At least for what I want to draw right now..
If a sub needs thier hands held,might be the wrong sub..

[Allen42acj]

I have been thinking about this.
Most people try and go the cheap way saving money by hiring a low cost drafter..
It is their responsibility to check every thing then.
If they want to save and take a chance,fine.
If they want to hire some one like Wendy with a degree and more experience drawing they will pay for it..
Kind of like the name brand with an extended warranty..
It also depends on the job..Having good subs is important.Mistakes do happen..
But some one incompetent should not be doing working drawings..

[RMorrison]

I have been thinking about this.
Most people try and go the cheap way saving money by hiring a low cost drafter..
It is their responsibility to check every thing then.
If they want to save and take a chance,fine.

Allen,
The problem with this view is that the amount you charge has no relationship to the responsibility and liability you incur when you set yourself up as a professional drafting service. Your liability is not less just because you're "cheap". It is not a homeowner's job to check your work. (If you are drafting strictly as a subcontractor to a contractor, this may provide some reduction in liability. I get the sense that most people on this forum are working directly for homeowners, though.)

If you find yourself in big trouble with the IRS after using a part-time accountant working out of their home who makes a mistake, does it really matter that the accountant is not a full-fledged CPA in a big firm? (Other than the deep pockets issue, of course.) How would you feel about that cheap accountant saying to you, "Hey, you knew I was cheap - you should have checked the tax laws yourself!" ?

[Allen42acj]

Richard
I would not go to a part time accountant..
It might not be perfect.
I have caught lots of mistakes on plans that I have built from.
Most things were not built before I noticed,that's why good subs help.

I do not want to pass the blame for my mistakes..
With houses getting bigger more care has to be taken..
Your house and mine are probably very different..

Common sense should be used when taking on a job..
I wanted to show the back to,still working on it..There will be more windows..