Engineering, Consulting, and Liability Insurance

[Maui]

A topic of discussion that was recently broached by myself and another professional engineer is the subject of liability. He recently decided to go out on his own and start a manufacturing company to produce specialized products for use on satellites. He just started an LLC, and I asked him what he would purchase for liability insurance. He replied that he didn't need it; the LLC was his form of liability protection. I disagreed, but would like to hear from the folks on this forum voice their opinions. I would think that liability insurance would be especially important in this type of business venture; the financial ramifications could be enormous if his products caused a system failure in an orbiting satellite.

This also got me thinking about liability insurance and consulting projects in general. If you perform engineeeing consulting work for a corporation (not civil, building design, or public works related projects), but are never required to stamp any drawings or documents, what level of liability are you exposing yourself to if you don't carry insurance?

Maui

http://www.EngineeringMetallurgy.com

 

[casseopeia]

Doesn't your state require minimum insurance coverage, like General Liability? Even though the guy has an LLC, there is always the risk of some shark attorney getting around that veil.

Although I can sort of see his point. It's not like he's producing a mass-marketed product. It's very specialized and used presumably by smart people. You don't have your average,everyday idiot trying to balance a cup of steaming coffee on their lap while they dig out $1.47 from their change purse, managing to spill the boiling liquid on their crotch and ending their sad sex life. I would assume there are sufficient checks and balances. Insurance is prohibitively expensive.

If you are offended by the things I say, imagine the stuff I hold back.

 

[GregLocock]

I think you'll find that the whole space rockety/big firework thing is insured at the mission level. Usual practice in Oz is for the principal of the firm to put all personal assets in the spouse's name, which gets exciting come divorce time.

Cheers

Greg Locock


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