Cost of E & O insurance

[RMorrison]

Your house and mine are probably very different..

Since I live on a boat, I can guarantee it!

[Allen42acj]

Just like Quincy..
Magnum did better with the ladies..
I think that would be great living on a boat...

[John D Atkinson]

AIBD makes E & O insurance available to its members. The cost is about $3,000.00 for up to $300,000.00 gross receipts and there is a $5,000.00 deductible.
Contact: Jean-Marie Nigles

[lbuttery]

John:

check the qualifications, I don't think it is available to any member just those who are licensed or certified.

It's been awhile since I looked but that was my understanding.

Lew

[WendyWelton]

Allen,

Richard is correct.

"I do not want to pass the blame for my mistakes.."

What Richard and I are trying to tell you is not to avoid responsibility - it's to have the "punishment" have some relationship to the amount you are paid.

Let's say you pay a pretty smart geeky computer-nerd teenager to fix your brand new $5,000 super cad box. He says he can do it. You tell him you'll pay him $50.

He does something wrong and fries the whole thing. Does he owe you $5,000? Or did you assume some of the risk when you hired a non-professional?

Or - similar scenario - he's 300 miles away. He uses GoToMyPc to look at your computer and tells you what's wrong. You find "a guy" locally who knows how to swap parts. It's the right diagnosis, the right part, but "the guy" crosses some wires and blows it up. Is our friend the geek responsible? He put the right things on the drawings (the parts list), but the contractor didn't do the flashing right ("the guy" and the crossed wires).

I don't think in either case we'd expect the non-professional and uninsured teenager to foot the whole bill, much less tack on the snowballing costs from your lost business until the amount is so high that his college fund is wiped out as well.

Allen - I hear you not wanting to pass the buck. This isn't passing the buck. It's controlling the value of the buck.

A portion of every fee that somebody pays me is actually insurance. Insurance is protection against financial loss. You don't get full insurance coverage with no deductable without paying for it. You don't get that from anybody and your clients shouldn't get it from you.

I'm hammering away at you on this because I know how devastating a relatively minor case can be, and don't even want to think about a major loss without either coverage or a ****ed good contract that controls the bleeding.

[Allen42acj]

Wendy and Richard

I agree that the risk and reward should be in relationship.
Maybe I am just not expressing myself right.

I like the idea of the 2 Waivers you suggested.

Someone will still have to pay for the mistakes..Who?

This is going back to certifying drafters so the people can tell if they are getting someone that knows what they are doing or just bought the software and put out their shingle with no background..

Then if they go the cheap route and hire a person that shouldn't be doing it they know.

To put waivers and disclaimers all over a plan and thinking that takes away all responsibility is wrong.

To many people just want to blame others.
As a carpenter there is no insurance if I make a mistake..

Many years ago I worked for a guy that forgot the Garrison on a house and we had the gables built.
Same guy cut all the rafters without checking them first on another job.All to short.

Luckily I have not done anything that stupid..

[Larry Kumpost]

I probably should not get started in this but...

The really sad part of this whole topic is the way our legal system works...or perhaps I should say does not work. I don't call it our "justice" system anymore since, to me, that term has become an oxymoron.

What I am talking about is that just having E & O insurance can make you a more likely target. It is the "deep pockets" aspect of the legal system and is a close relative of the "shotgun" law suit. Basically it means an attorney will name people in a suite regardless of guilt because they have money or are backed by insurance. Given the cost of legal services, it can cost less to settle than to defend yourself. Since you must accept some level of "deductible" to keep the insurance costs reasonable guess who gets to pay.

[lbuttery]

To put waivers and disclaimers all over a plan and thinking that takes away all responsibility is wrong.

Allen:

Yes, if you are the one signing and submitting the permit and the client is your client.

No, if you are the drafter working for the builder (who signs and submits) and have no contracts with the client.

I am responsible for my mistakes with the product I turnover to the builder, once he accepts it, signs it, and submits it. Then my responsibility is over.

Lew

[Allen42acj]

Lew
I think you get my point.
If you do a plan for a home owner,you should not expect disclaimers to cover you..
My comments are not directed at you.


Warning,drafter has no construction experience.
Mistakes are the sole responsibility of the owner.
We just do pretty pictures that may or may not
work in real world. Software was on sale..

That should cover people..

[lbuttery]

Allen:

I posted my clarification because your statement was a blanket statement and future readers would be confused/concerned, etc.

so I'll say it also:

Anyone who has the homeowner as the client should be and IS responsible for their work product.
If your contract is with the homeowner then be prepared to stand by your work.

Lew

[John D Atkinson]

Lew:

I had a telephone conversation with the agent for AIBD's liability insurance program about a month ago. I understood her to say the insurance was available to all AIBD members. If anyone is interested, you can get the agent's contact information from the following website:

http://www.aibd.org/for_professional..._benefits.html

[lbuttery]

John:

You are correct.

I talked to Jean Marie and she is sending the application for E&O
with quotes etc.

an example would be $1M with $2,500 deductible for approx $5K/year.

This is available to AIBD members.

Lew

[DSomerville]

Regarding E & O Insurance-

Does anyone know if the insurance is available to "General Members" as well as "Professional Members". I for one do not have the five years of full time experience to apply as a "Professional Member.
Thanks

[johnN]

Condos are a particularly difficult deal. A friend in Reno was approched by one of the national builders to buy some of his land for a condo project. $600K sell.
Even this giant company, he found out, was budgeting $30,000 per unit for insurance coverage against owner lawsuit. As opposed to 5K for a single family home. Having owned some condo investment properties, I can first hand tell you that the owners think that when they buy -all expenses are covered by their fees, they never read the CC&R document, and when things need maintainance they sue the builder/ designer etc. The cost of litigation is so high they almost always settle. One of my neighbors is a "forensic Architect" (LOL) he has made millions trumping up defects. The advice is to stay away from condo projects unless all the drawings appear on the builders title block and you are covered by his insurance. Even then think twice.

[Draw4Food]

If you have a disclaimer which clearly states (among other things) that your liability will be limited to the price you are paid, wouln't that be adequate? Nothing will protect you 100%, of course, but shouldn't this be a reasonably effective firewall?

I ask this from the standpoint of a designer, not an architect. Aren't architects "on the hook" due to the nature of their licensing? Like other professionals who are licensed, like a structural engineer or accountant, their certification implies that they "know what they are doing". Not to demean designers, but we seem to be held in lower esteem and to a lower standard than architects, and I wonder if the courts share this opinion?

Has any designer here ever been sued while having a solid disclaimer in place?

In the interest of Chief users solidarity, I hereby say a curse upon Wendy's legal antagonists.