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Institution Forums > General > PI Insurance for non-chartered engineer View modes: 
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Mike - 20/03/2013 21:37:00
   
RE:PI Insurance for non-chartered engineer
Hi Eliza,
this is a good question. I'm no expert, but Ltd Co status may have the advantage of providing an extra line of protection if for some reason the insurance company decided not to pay out. Also, as far as I know (please correct me here if I am wrong) the PII only covers you whilst you are paying the premiums, so if in a few years time you decide not to keep doing private work, you will still need to keep paying the premiums until the time when you think any more claims are unlikely. The Ltd company status might be useful at this point.
Best wishes
Mike

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Baz - 28/11/2013 12:44:18
   
RE:PI Insurance for non-chartered engineer
PII gives you cover up to the limit of your policy, be it £250k, £5 whatever. If your liability under a claim were to be in excess of your policy limit, then you are liable for the difference. As a sole trader, that would be you personally ie all your assets are at risk; hence the reason for having limited company (or limited partnership) status, as the co/partnership is then liable. If these don't have enough assets, then they will get folded, but you personally won't lose the shirt off your back.

When you decide that you've made enough from this game to retire (hah!), then you will need run-off cover, if you haven't passed your business onto someone else who is continuing with the PII. This covers you and your estate for up to 12 years after your demise for projects up to the date that you retire: you cannot then do any further projects under that policy.

Look up Merritt v Babb for how exposed you as a professional can be to the non-existence of PII, even if you are only an employee. This should concentrate the mind in ensuring that you get your insurance in order.

As Mike says, if you stop paying the premiums, your cover ceases.

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Skelton - 14/02/2014 20:04:12
   
RE:PI Insurance for non-chartered engineer
I think, unfortunately, that even ltd liabilty doesn't totally cover us as consulting engineers we can still be taken to court for negligence. Even if we work for a company? Do I have this wrong? Is there a cut off i.e. obviously a new graduate is reliant on thier work being checked but an associate director wouldn't expect thier work to be checked especially if they are chartered. Chartship brings an altogether depth of responsibilty.
Has any one had a claim against them taken to court?
It would be interesting to know excuses that insurance companies have used not to pay out.
If an insurance company finds a reason not to pay out, then the client will have no other line than to find the individual responsible?

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Member (MIStructE)
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Oliver Tierney - 16/01/2015 14:03:53
   
RE:PI Insurance for non-chartered engineer
I notice that this forum has been running for quite a period, starting in 2009. The main issues arisnig are how to get PII, and also how to set up a 1 man band.
I find it interesting that in other forums there are many posts regarding the poor status of the Structural Engineer, others dealing with the ethics of the Structural Engineer. I find it astonishing that no one else seems to have raised the following issues.

Some of the advice on this forum ranges from very poorly informed to encouraging contravention of the Institution's ethics.

Some are seeking PII who, in my opinion have not got the first clue as to what it is intendedd for, what it should include, what it costs and how long it is needed for. These people intend to run a business!!! My heart sinks. If they do not understand this side of the business, then I can only presume they haven't looked into other areas of running a business either. I'm not against 1 man bands, I just wish that they made an effort to  educate themseilves better. As an employee of a firm it is very easy to think, 'I can do this from home and earn much more'! When difficulties set in, how many will maintain their PII for the runoff period?
It will always be possible to obtain PII from someone, however there are some that one would NEVER want to be getting their PII from. Always remember, if something looks cheaper than it should, it probably doesn't do what you want. The same rule applies to buying PII as it does to buying Structural Design Services.

To be fair, at least those posting here seem to be seeking some information, for each one posting how many are launching head in without due consideration. It is this type of behaviour that creates a bad impression.

In relation to the advice of start up your own whilst continuing to working for your employer, I find that completely unethical unless it is being done with the Employer's knowledge and agreement. I'm sure that once you have set up, and maybe have employed someone, you would not be too impressed by that employee setting up his own 1 man band and taking 50% of your clients with him.

My last comment to those contributing on this forum.... read some of the other forums!!

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