Something else to consider for us small operators: LLC and
incorporation offer some protection as well. If your company is sued,
and then declares bankruptcy, there's not going to be much for the other
party's attorneys to go after. I've heard it described by my attorney,
that most attorneys won't even take the case when they hear the
defendant is uninsured. When you are insured, they will sue for exactly
what the insurance covers + your liquid assets. They don't want your
old truck and tools.
Everything we do, (especially driving) has risk. We have to decide on a
job per job basis whether that risk is acceptable for the amount of
money we're charging. Bigger, more complicated jobs = more risk,
therefore more insurance is probably warranted. Some projects require
so much insurance that you can't even do the job. I worked on some
pipeline projects that increased the required insurance to $20 million
at a cost of almost $100k/ year. We don't do that work anymore.
This is also why I don't have a bunch of kids running around in trucks
making mistakes every day; too much liability. I closely supervise
everything that my company takes responsibility for, and I sleep well at
night with my standard contractor's liability insurance.
Remember, insurance agents primary goal is to sell more insurance. Of
course they want you to have an E&O policy, too.
Ray Walters
Remote Solar
On 3/11/2024 7:41 PM, Howie Michaelson via RE-wrenches wrote:
William, et al,
As always, a thorough explanation of your considered opinion. Thanks.
Food for thought and a question to others who have more insight to the
world of insurance and liability than I:
My understanding of General Liability insurance, is that it is
intended to cover mistakes in the physical work process - that is
things like frying a piece of electronics due to faulty installation
practices, dropping a hammer onto the pet cat, leaving an exposed
conductor that one of the toddlers in the house stumbles upon and
decides to see how it tastes, hanging the inverter on a sheetrock wall
using toggle anchors, or one of a million mistakes possible during or
after the installation. On the other hand, if I design an 10kW
inverter to backfeed through an outlet (or more likely a conductor
that inadvertently undersized for the distance it is running), or I
design something that is compliant with the 2020 code cycle, but
unbeknownst to me the jurisdiction I am working in adopted 2023 last
week, and the design later is found at fault in a fire that burned the
house down, General Liability does not cover me. That is when an E&O
policy would come into play and cover my ass. THis is what a previous
insurance agent informed me of after being insured through them for 15
years without an E&O policy (thank you very much). If this is true,
then it doesn't seem like it matters whether you or someone else does
the work, if it is your design that is being used. Without an E&O
policy, you potentially own any design errors for the life of the
system. I wasn't sure if you were saying that you are comfortable
taking on that liability because you have enough faith in your design
work, or if your impression is that if you do the installation work, a
general liability policy will cover any problems. I would understand
the former (although I don't think I would be willing to accept that
liability unless perhaps the cost of the policy was prohibitively
expensive). If my understanding of these policies is not accurate,
then I would love to hear a correct interpretation of what they do and
don't cover.
Howie Michaelson
Sun Catcher
On Mon, Mar 11, 2024 at 8:02 PM William Miller via RE-wrenches
<re-wrenches@lists.re-wrenches.org> wrote:
Dave:
I have thought about this dilemma pretty carefully in the past. I
have come up with a line of logic that works for me. I will try
to keep the explanation short but there is some nuance to it that
might take some ‘splaning.
As a licensed electrical contractor it is my responsibility to
design the systems I install, with certain exceptions. I don’t
know if this is the correct term, but I call it design/build. My
exposure is covered and my requirements are met if I have a
general liability policy and the required bonding any contractor
would. Coverage for errors and omissions is not required.
If the scope of the project is complicated beyond some level then
the services of a PE will be required and a wet-stamped plan may
be needed, or at least sensible to provide. The client or the
building department may require this added service.
The level of complexity at which external, licensed design
services are needed is subjective. Most electricians don’t need a
PE to draw up a new or replacement service or the details of
configuring branch circuits, to name a few examples. The
requirements can be deduced from the particulars of the project
and the language of the NEC. If the contractor is inexperienced,
then more design help is needed. If the contractor is more
experienced, then more complex projects can be designed in-house.
I decide for myself if I am qualified to do the design work, or not.
Before a bid is prepared some level of design needs to be
accomplished in order to define the scope of the project, specify
the materials and predict the labor required. My preference is to
design the heck out of any job so I don’t get any unpleasant,
expensive surprises once the project commences. I don’t do this
level of design work for free. There is always a work order for
design time.
However I do not always get the contract to perform the physical
work. The bid price may be too high or the project may not go
forward for any number of reasons.
Unless there is some proprietary information in the design, once
the customer pays my design fee the customer owns that design and
is entitled to deliverables in the form of drawings, calculations,
bill of materials, etc. If I hand over those documents but do not
install the work, I am essentially working design only, not
design/build. However because the intent was to design a project
I would build, I don’t worry about that detail. I assume no
liability for any part of the project unless I am hired to build
it. I have no control over what the client does with the design
information once I turn it over.
Under this logic I am pretty comfortable providing occasional
design-only services as long as I could demonstrate, if asked,
that I was operating in good faith on a design/build project.
This intent can be satisfied by the language of the work order,
specifying the client will provide an opportunity for you to bid
on the work in hopes of winning the contract.
This approach might work for you or at least give you something to
think about. Not everyone is willing to take the same risks.
Sorry about all of the words. I could not explain this approach
any more concisely.
William
Miller Solar
17395 Oak Road, Atascadero, CA 93422
805-438-5600
www.millersolar.com <http://www.millersolar.com/>
CA Lic. 773985
*From:*RE-wrenches
[mailto:re-wrenches-boun...@lists.re-wrenches.org] *On Behalf Of
*Dave Tedeyan via RE-wrenches
*Sent:* Sunday, March 10, 2024 3:23 PM
*To:* RE-wrenches
*Cc:* Dave Tedeyan
*Subject:* [RE-wrenches] Insurance for solar design and inspections
Hi All,
I have an insurance question and am very curious about how others
deal with this, or don't. People will sometimes ask us to either
do some design work for a system that we will not be installing,
or to inspect a system and give my professional opinion about it.
These are two separate work situations.
Recently, our insurance agent brought it to our attention that we
should have insurance specifically for these kinds of work, and it
is not something that is covered under our general liability
(contractors) insurance.
Their recommendation for design work is to get "professional
liability" (errors and omissions) insurance. Even though I may do
one or two designs a year, we are looking at a roughly $12,000
policy. This would be meant to cover us if I make a mistake in the
design that leads to some sort of failure or fire.
Their recommendation for the inspection type work is to get
essentially a home inspector insurance policy for about $2400 per
year. Again, this is something that we do a handful of times per
year. This insurance is meant to cover us if I inspect a system
and miss something that then ends up being a problem or a hazard.
With a brief conversation with a lawyer acquaintance, he thought
that I may be fine with out these insurances. It sounded like I
should have something in my service contracts that would
essentially say something like "we will do this work to the best
of our ability", and then if something does go wrong and the
homeowner takes us to court, it is upon them to prove that we
missed something that a reasonable person would have caught. My
business manager does not like this because we could still have
lots of lawyer fees and have to show up in court if we were to get
sued, even if the problem was not caused by a lack of diligence on
our part.
So my question to all of you is, do you have these insurances? Or
do you just not do designs and inspections unless you are actually
turning some wrenches on the site so that your general liability
insurance covers your work? Or, is this a case of our insurance
agent putting ungrounded fears in our head?
Thanks for your thoughts.
Cheers,
Dave
--
Logo <https://www.sungineersolar.com/>
*Dave Tedeyan, P.E.
Owner | Sungineer Solar*
*p: *he | him | his*
a: *1653 Slaterville Rd.| Ithaca, NY 14850
*w:* www.sungineersolar.com <http://www.sungineersolar.com/>
*c:* (607) 270-0370
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