Question on importance of Professional Liability Insurance.

[Tractor Seabee]

If you work as a contract service provider, in most fields of endeavor, as a professional or technical specialist. Usually your client will demand proof of professional liability insurance. The limits and the price vary depending on the perceived risk. The client states a minimum in your contract but you can carry more at your option. I found prices all over the spectrum with a $5K spread from top to bottom for the same policy and limits. I finally settled on $1500/yr for a $2M policy. That is in addition to general business insurance.

Extended liability policies protect you only for personal acts, vehicle related that are over your auto policy limits, and claims related to your real/personal property. It does not cover you at your work environment. For mine I have to file a questionnaire annually that is two pages long related to the exceptions they do not cover or charge more for.

In my younger day when I started to work as a construction general foreman, superintendent, and project manager this subject came up in a seminar held by the union for us; accident claims and claims over personnel actions were beginning to be filed not only against the company but also naming the supervisory chain in the lawsuit. The union's lawyer recommended we all cover ourselves as he was not allowed to represent us as a union member for those type claims. He was available at no cost to advise but not represent. His sage advice was "do not trust your employer to protect you, especially if you were directly involved in the incident resulting in the suit".

Now that I have a construction technical services consulting business I am in the eye of the storm. Clients all require sharing of risks in this business climate to keep their insurance costs down.

Maybe its a conspiracy by the lawyers to wring more fees out of an incident for all their brothers in crime.

Yes, you need to protect your ASSests if you have exposure.

Ron

 

[forgeblast]

Before I did my student teaching we had a retired superintendent come in and tell us to be prepared to be sued 5 times during our careers. He suggested making sure that we kept the mortgage on our house until we retired etc so that our standard of living was not lowered by a settlement.
With the professional organizations we belong to we have 1mill liability insurance through them. For my spoon carving business, I pay 300 a year for an additional 1 million liability but that is not product based its in-case of something happening at a craft fair, like a tent being carried by the wind and taking out other tents.

 

[Western]

What Ron, (Tractor Seabee) said.

We cant even bid on any commercial contract without providing proof of Liability insurance. One of the companies (largest retailer in the world) requires a $4 million umbrella to coincide with the LI. Very small companies don't ask, like for a one time job, but everything that includes a contract does, for us.

 

[ultrarunner]

I'm a W2 employee the last 23 years.

There was a case a few years ago at another Hospital where due to Doctor error, a police officer became legally blind in one eye, ending the officer's career.

The Doctor was well respected with a perfect record.... had tens of thousands of similar procedures without incident and then it happened... the case involved a new eye laser and the setting was off by a decimal point.

Everyone got sued and the manufacturer and the Doctor's carriers settled... it was turmoil for just about everyone involved if only from admitting the patient.

Doctor closed his practice and left medicine.

Long gone are the days where every surgery is done freehand and in eyes, million dollar lasers are being used more and more for precision incisions and surgery is often done in front of a computer console... accurate and fast.

 

[Gator6x4]

We carry a 2 Million dollar umbrella coverage for my Mrs. and I.

I also have carried an "Umbrella Policy" for years. One never knows when the "Olive" will be too large and choke someone.

 

[3930dave]

If you haven't already UR, I'd approach your employer about covering your increased insurance costs, esp. if your compensation in light of increased responsibilty hasn't been adjusted upward already.

Much of this is just about punting cost elsewhere. For many professionals, if they can't pass along major insurance costs, it becomes one more reason to stop practicing.

I've seen MDs graduate here, and head directly to the USA to practice. More than a few end up returning to Canada. Personal reasons can vary, but I suspect that the USA legal climate is a big factor.

Not that we don't have problems here.... many degreed engineers work on the production line at Ford in Oakville. When comparing net $ vs. responsibility, many are better off bolting cars together, than signing documents as a PEng.

Rgds, D.

 

[ultrarunner]

I know two Doctors that are now Trauma Nurses... they love what they do without all the problems of running a business.

Also, by law in California, Nurses must be paid overtime... other professionals, such as Doctors and Engineers often are exempt.

 

[dodge man]

I am a land surveyor and have worried about this same issue. I also have an umbrella policy but I doubt it would cover my work. Where I work we have what is called errors and omissions insurance plus a policy if we would injure someone or damage property. I've only been involved in a law suit once that was a direct result of my work in the 30 years I've been doing this. Both my company and me personally were named. My company would have defended me if need be but the suit was dismissed by a judge right away. If I had really done something wrong or screwed up bad who is to say I wouldn't have been hung out to dry.

 

[3930dave]

I know two Doctors that are now Trauma Nurses... they love what they do without all the problems of running a business.

Also, by law in California, Nurses must be paid overtime... other professionals, such as Doctors and Engineers often are exempt.

Same OT story applies here too. Doctors (even here) do a little better, but Engineers don't make what many people think they do for salary.

Rgds, D.

 

[Tractor Seabee]

I am a land surveyor and have worried about this same issue. I also have an umbrella policy but I doubt it would cover my work. Where I work we have what is called errors and omissions insurance plus a policy if we would injure someone or damage property. I've only been involved in a law suit once that was a direct result of my work in the 30 years I've been doing this. Both my company and me personally were named. My company would have defended me if need be but the suit was dismissed by a judge right away. If I had really done something wrong or screwed up bad who is to say I wouldn't have been hung out to dry.

O & E is what the OP is discussing as professional liability. That is what my post described. Does your employer pay the O & E or are you an independent consultant? Beware, the entity that buys the insurance controls it; you can still be left to twist in the wind by a less than ethical employer that buys the insurance for all employees. Get legal opinion on this as it varies by state and province based on their commercial/professional services code.

Ron