I am a young self-emplyoed architect looking into insurance for the first time. Does anyone have any info to share on how architects fare in the court of law...how often we get sued, for how much, and how often we lose?
It doesnt seem right that our fees are usually so much less than the potential expense of a small mistake. I suppose the courts probably acknowledge this fact.
as a client once remarked (about architects in general) after declining to help him by drafting some precast concrete shop drawings due to liability, "whaddya mean - you swim in an ocean of liability."
And the best way to make sure that you don't get sued is make sure that you don't have any assets. Lawyers call it being "judgement averse". Should be easy if you are just starting out.
seems like somewhere there should be statistics. and legal precedents on file. I assume that the insurance companies base the rates on something scientific.
Isn't there a way to protect private holdings (such as a house) from seizure in company liability cases? You should ask about that. Perhaps you need to set up your business a certain way to make this happen.
Also, as a licensed professional you can still be held personally responsible for acts of negligence or ommission even if you are otherwise protected by incorporation.
I've heard from older self practitioners that while corporate status may protect you from business liability, as a registered design profesional, such as an architect or engineer, you can be held personally responsible for your creations and drawings, seperate from the corporation.
That said, a lawyer told me they usually sue because you have insurance and thus a healthy gurenteed payout. If you can get by with out insurance ( may be illeagel in your state, and limits the clients) you may be to risky to go after ironically. Plus, believe it or not, lawyers dont like to ruin personal lives.
right..skip insurance...but then what if I do make a big mistake. or make the mistake of working for a litigious jerk?
facts: I own a house with my brother. I believe that if i was sued losing the house would also screw my brother...which doesnt seem very fair.
because I am good and also because of the type of projects I do, res. remodel, low end at this point, my risk is low (as far as I know) ...but I need more facts.
If you have assets, insurance is the way to go. You will be represented by the insurance company's lawyers in the event of litigation, and in most cases settlements are at most for the amount of your deductible. The other important thing to keep in mind is that most contracts stipulate either arbitration or mediation before litigation for dispute resolution - this is an important clause to have in your contracts as the settlements or awards under arb/med are usually far less than a court judgement. DPIC used to publish a book on insurance and professional liability - you should try and track it down as it is a fantastic reference (if boring as all hell).
Not having insurance would seriously limit the projects that you could go after. Practically any institutional, municipal, or larger commercial project will require proof of insurance even for your proposal or statement of qualifications to be reviewed. Usually projects that require insurance require either $500,000 minimum or $1million, but there are some insurance policies available with limits as low as $250,000.
One other thing to consider while you're on the insurance path: you may want to look into business insurance too - not just errors and omissions. Policies that cover your equipment from things like fire and theft also usually include coverage for incidents such as a client being injured in/on the premises of your office - which is something that errors/omissions insurance of course does not cover. This is especially important if your office is in your home or other property that you own. Your business insurance policy can also include your worker's comp insurance if you have employees, and also things like liability for accidents that your employees have in their or your vehicle while working. Some will also cover things like employee theft.
i was insured for 2 mill when i was doing my design/build work..cost me 900 a year or so.....
since i was the designer/contractor then i needed it...... if you are doing work under 3500 sqft then you may be able to give the liability to the contractor........ if not then you might have to up your rates to cover your insurance costs.......
i would just put it in the contracts that you are not liable for anything.... you just design it and the contractor should be able to see where beams/etc would be ungraded or doubled up/etc.........
b
Sep 19, 06 11:52 pm ·
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Insurance
I am a young self-emplyoed architect looking into insurance for the first time. Does anyone have any info to share on how architects fare in the court of law...how often we get sued, for how much, and how often we lose?
It doesnt seem right that our fees are usually so much less than the potential expense of a small mistake. I suppose the courts probably acknowledge this fact.
as a client once remarked (about architects in general) after declining to help him by drafting some precast concrete shop drawings due to liability, "whaddya mean - you swim in an ocean of liability."
talk to your E&O insurance rep - they'll know.
And the best way to make sure that you don't get sued is make sure that you don't have any assets. Lawyers call it being "judgement averse". Should be easy if you are just starting out.
too late. I own a house......
seems like somewhere there should be statistics. and legal precedents on file. I assume that the insurance companies base the rates on something scientific.
Isn't there a way to protect private holdings (such as a house) from seizure in company liability cases? You should ask about that. Perhaps you need to set up your business a certain way to make this happen.
I have been advised that as a sole proprietor LLCs dont hold up in court.
works if you have employees or partners.
Also, as a licensed professional you can still be held personally responsible for acts of negligence or ommission even if you are otherwise protected by incorporation.
I've heard from older self practitioners that while corporate status may protect you from business liability, as a registered design profesional, such as an architect or engineer, you can be held personally responsible for your creations and drawings, seperate from the corporation.
That said, a lawyer told me they usually sue because you have insurance and thus a healthy gurenteed payout. If you can get by with out insurance ( may be illeagel in your state, and limits the clients) you may be to risky to go after ironically. Plus, believe it or not, lawyers dont like to ruin personal lives.
right..skip insurance...but then what if I do make a big mistake. or make the mistake of working for a litigious jerk?
facts: I own a house with my brother. I believe that if i was sued losing the house would also screw my brother...which doesnt seem very fair.
because I am good and also because of the type of projects I do, res. remodel, low end at this point, my risk is low (as far as I know) ...but I need more facts.
If you have assets, insurance is the way to go. You will be represented by the insurance company's lawyers in the event of litigation, and in most cases settlements are at most for the amount of your deductible. The other important thing to keep in mind is that most contracts stipulate either arbitration or mediation before litigation for dispute resolution - this is an important clause to have in your contracts as the settlements or awards under arb/med are usually far less than a court judgement. DPIC used to publish a book on insurance and professional liability - you should try and track it down as it is a fantastic reference (if boring as all hell).
Not having insurance would seriously limit the projects that you could go after. Practically any institutional, municipal, or larger commercial project will require proof of insurance even for your proposal or statement of qualifications to be reviewed. Usually projects that require insurance require either $500,000 minimum or $1million, but there are some insurance policies available with limits as low as $250,000.
One other thing to consider while you're on the insurance path: you may want to look into business insurance too - not just errors and omissions. Policies that cover your equipment from things like fire and theft also usually include coverage for incidents such as a client being injured in/on the premises of your office - which is something that errors/omissions insurance of course does not cover. This is especially important if your office is in your home or other property that you own. Your business insurance policy can also include your worker's comp insurance if you have employees, and also things like liability for accidents that your employees have in their or your vehicle while working. Some will also cover things like employee theft.
i was insured for 2 mill when i was doing my design/build work..cost me 900 a year or so.....
since i was the designer/contractor then i needed it...... if you are doing work under 3500 sqft then you may be able to give the liability to the contractor........ if not then you might have to up your rates to cover your insurance costs.......
i would just put it in the contracts that you are not liable for anything.... you just design it and the contractor should be able to see where beams/etc would be ungraded or doubled up/etc.........
b
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