for a 6 million dollar project, what amount of errors and omissions insurance is reasonable to ask a structural engineer to get? is there a rule of thumb?
we always have consultants[main services] carry what we are required to carry under our owner architect agreement. $6 mil is not a big project so it shouldnt be too bad. we had one project where the scope of their work [under us] included exterior inspection of the existing facade [its required for highrises in chi town either every year or every 4 years]. i cant remember the specifics of what we did in our agreement, but in that case it was more.
make sure you get a cerificate of insurance naming you, owners, etc. etc. as additional insured. dont forget the work comp, business, cars etc. you should get as an additional on that also.
if you do some state projects in ill., they require the prime consultant to carry 20% of the construction cost in e&o. [which i always felt was high]. so thats 1.2 mil. they didnt speci if that was per occurance or year total. a younger practice with little built work can probable have the 2 numbers the same. its when you have a lot of built work / on the boards or completed that i think your limits per year should be considered higher.
the engineer may argue that since his scope includes 25% of the construction budget so his limits should reflect that. i say no. everybody will get sued if a project goes south and they dont look at it as percentage of construction.
you might also remember your pass thru revenue effects your e+p premium so if this dude gets a 1.5% fee, say 90k, you may premium may be 1% of all revenue [and if your nice your broker may have you take out reimbursable from the revenue formula]. so your anual premium for his service may be in the range of $900. and remeber multiply that and escalate it for 10 years. hope you mark up you consultants services. this is one of the reasons under the right situations, it better [financially at least] to have your consultants directly employed by owners. i have used the mark up issue a point of discussion [and savings] with a client where i didnt really see the need to carry the consultants.....
if this guy doesnt presently have insurance and has been doing engineering work without it, you should also consider some clauses about you getting cancelation notification from his insurance company and some claus to require the consultant to carry this insurance for a period of not less than 10 years past substantial completion.
Aug 19, 04 11:56 pm ·
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how much insurance to ask from a structural engineer?
for a 6 million dollar project, what amount of errors and omissions insurance is reasonable to ask a structural engineer to get? is there a rule of thumb?
we always have consultants[main services] carry what we are required to carry under our owner architect agreement. $6 mil is not a big project so it shouldnt be too bad. we had one project where the scope of their work [under us] included exterior inspection of the existing facade [its required for highrises in chi town either every year or every 4 years]. i cant remember the specifics of what we did in our agreement, but in that case it was more.
make sure you get a cerificate of insurance naming you, owners, etc. etc. as additional insured. dont forget the work comp, business, cars etc. you should get as an additional on that also.
if you do some state projects in ill., they require the prime consultant to carry 20% of the construction cost in e&o. [which i always felt was high]. so thats 1.2 mil. they didnt speci if that was per occurance or year total. a younger practice with little built work can probable have the 2 numbers the same. its when you have a lot of built work / on the boards or completed that i think your limits per year should be considered higher.
the engineer may argue that since his scope includes 25% of the construction budget so his limits should reflect that. i say no. everybody will get sued if a project goes south and they dont look at it as percentage of construction.
you might also remember your pass thru revenue effects your e+p premium so if this dude gets a 1.5% fee, say 90k, you may premium may be 1% of all revenue [and if your nice your broker may have you take out reimbursable from the revenue formula]. so your anual premium for his service may be in the range of $900. and remeber multiply that and escalate it for 10 years. hope you mark up you consultants services. this is one of the reasons under the right situations, it better [financially at least] to have your consultants directly employed by owners. i have used the mark up issue a point of discussion [and savings] with a client where i didnt really see the need to carry the consultants.....
if this guy doesnt presently have insurance and has been doing engineering work without it, you should also consider some clauses about you getting cancelation notification from his insurance company and some claus to require the consultant to carry this insurance for a period of not less than 10 years past substantial completion.
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