OT: liability insurance

Robert,

We've can't get General & E&O from the same carrier, so we split it up. Our general is about $500/yr, but the E&O is about $6000/yr through the IEEE. If you find a way to get this type coverage for less, please let me know.

Blake

--

--Ray Andraka, P.E. President, the Andraka Consulting Group, Inc.

401/884-7930 Fax 401/884-7950 email snipped-for-privacy@andraka.com

"They that give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759

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Blake, Ray -

Thanks. Obviously I didn't carry the O&E coverage before. I did the minimum that a customer back then required. The new customer is specifically asking for O&E (the contract calls it "Contractual Liability" coverage). Another $6k - sweet. I love spending money on insurance almost as much as paying taxes.

Robert

--

--Ray Andraka, P.E. President, the Andraka Consulting Group, Inc.

401/884-7930 Fax 401/884-7950 email snipped-for-privacy@andraka.com

"They that give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759

Amen!

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Hello Ray,

Nice seeing your post. Tell me, 1) what's involved in getting the P.E. moniker and 2) do you carry product liability?

Blake

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In the interest of accuracy (not criticism), "P.E." is not a moniker, which means "nickname".

"PE" stands for "Professional Engineer". A Google search using that phrase reveals a world of information on the subject.

--
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Martin Euredjian

To send private email:
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Gee, and here I was thinking Ray is a Private Eye on the side ! ;*)

Cheers, rudi ======================================================== ASICS.ws ::: Solutions for your ASIC/FPGA needs ::: ..............::: FPGAs * Full Custom ICs * IP Cores ::: FREE IP Cores ->

The P.E. license is issued by the state where you do business. All the states prescribe to the standards set by NSPE. Basically, it involves a combination of experience and sitting for some exams. The most used route is to sit for the Fundamentals in Engineering exam soon after you graduate from college. When you pass that exam (also known as the EIT) you are an "engineer in training". In order to sit for the PE exam, you need to have taken the FE exam within the past

12 years, or have 20 years of experience in your field of engineering (and someone to vouch for it), plus at least 4 years of engineering experience. The FE exam is rather grueling, and I don't think I'd want to take it if I wasn't fresh out of school, simply because it covers such a wide range of engineering and science topics. It is stuff that if you haven't seen it lately, you'll probably have trouble finishing the exam in the alloted time. I found the PE exam to be fairly easy, although it did take some study because it requires some breadth to your EE background...there are many sections on machines, transformers, power etc that I hadn't seen in quite some time. You also need to get references from a number of P.E.s familiar with your work (the number required varies by state), and depending on the state, some of those may have to be registered in the state you are applying. I found the hardest part was finding the references, as there are not that many P.E.s in electronic design for manufacturing.

Note that in order to offer engineering services to the public (this includes to other firms), you are required to have a P.E. registered to your firm in most states. Without it, the state can generally issue you a cease and desist order, and fine and/or imprison you if you don't comply. This is enforced to varying degrees in different states. There is an exemption for engineering for manufacturing, but it only applies to engineers on the company payroll, not to outside consultants. If you are consulting, you technically need to have a P.E. or have someone on staff with a P.E.

I carry professional liability, which covers the designs my firm produces.

Blake Henry wrote:

--

--Ray Andraka, P.E. President, the Andraka Consulting Group, Inc.

401/884-7930 Fax 401/884-7950 email snipped-for-privacy@andraka.com

"They that give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759

You're killing me, Ray! You seem to be an expert on all of the legal requirements and financial costs of running an engineering services business the right way. I hope this isn't because you learned the hard way how to protect yourself. :) Can you provide a bullet list of the things that must be in place to be in compliance legally and to protect yourself financially? Business license, P.E. license, CGL and O&E insurance ... anything else?

Thanks, Robert

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I once asked the county and state to tell me all the licences I would need to run my business. I was told that was not their job, it was up to me to contact every department in the government to ask if I needed permits from them!

I expect you could hire yourself out as a resource to inform startups about all the legal requirements, oh, that's what a lawyer is!

Expert? no, my expertise is in engineering. Just somewhat experienced.

I got dinged by the state when I first started out because I didn't have a P.E. on staff. Fortunately, they found me right before the deadline for registering for the spring exam, and I had already had plans to get it done. I was able to avert having the business shut down by sending a copy of my PE application to the state. The rest was found out through due diligence, and working with a good accountant and lawyer to set up the business.

Incorporation (not necessarily needed, but it does help with some customers and avoids a bunch of hassles since customers don't have to provide a 1099) Registration of the business as an engineering firm (need the PE on staff to do that) Worker's comp insurance if you have employees Tax withholding arrangements with all states you have employees in Business ID number All the piciune tax filings. Pension/Retirement plan.

Robert Seft> You're killing me, Ray! You seem to be an expert on all of the legal

--

--Ray Andraka, P.E. President, the Andraka Consulting Group, Inc.

401/884-7930 Fax 401/884-7950 email snipped-for-privacy@andraka.com

"They that give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759

many firms including mine thus call themselves " contract product design " firms and avoid the word engineering just to be safe ... even tho we have significant industry experience the PE exam requires a whole lotta studing on mechanical etc.

my question is would this effect E&O insurance ? mmmm