Liability of Structural Inspections 1

[DWHA]

I was recently approached by a bank to do some structural inspections of the occasional building and house. This would be a moonlighting deal, which my company is okay with.
My issue is that I do not have any liability insurance to due this work.
Has anyone ever done this kind of work on the side? If so, how did you handle it?

Thanks

 

[a2mfk]

I've done quite a bit of this type of work for private owners.

Describe in more detail of what they want from these inspections. Many times you can have a good letter agreement that will protect you from much in terms of liability if you are offering a limited structural "review" and offering an opinion. If you are being ask to "certify" as-built construction, use extreme caution and get a good contract and insurance. And tightly word your reports to state what you are actually certifying, and state all of the limitations of your investigation/review and all of your assumptions. There are several engineers up on charges by the Florida board right now (you can go to the website) who have written letters or reports and clearly did not perform due diligence. Not that this would apply to you...

If you get into doing any design work on the side, and are an ASCE member, you'd be surprised at how affordable E and O insurance may be based on your annual billings and type of work.

 

[DWHA]

Describe in more detail of what they want from these inspections:
The current one that they asked me to look at is a brick structure where there is a cracking to some extent in the brick wall and some bricks are missing. That is all that I know of right now.

a2mfk: Do you have an example of a blank agreement with a client that you you be willing to share? If not, I understand.

Thanks

 

[msquared48]

Never, but never, attest to the structural integrity of situations you cannot directly observe.

Come up with a disclaimer, and run it past your lawyer, that must be signed by either a bank rep or the employer that will limit your liabliity as to what can be directly observed, whether there were any drawings for your review, soils reports, etc.

Do not assume any more liability here than necessary. After all, you did not design the structure and should not be on the hook for it fully here.

Mike McCann
MMC Engineering
Motto: KISS
Motivation: Don't ask

 

[a2mfk]

DWHA- What are they asking you to do specifically?

I can find a couple of applicable contracts if you let me know.

If you can post your email address in some sort of pig latin type way, or a website of your company that has your email on it I think they will allow to be posted...

 

[csd72]

Your caveats can be more important than your observations.

 

[a2mfk]

Sorry DWHA, did not read your example. Sounds like a standard forensic investigation, these are in practice very low liability as you are offering your professional opinion on cause and origin of distress/damage. It can get more involved if you are asked for a solution or actual repair drawings.

 

[DWHA]

a2mfk
They want me to look at the structure and write a letter regarding the condition of the structure. I think they do not want to give out a loan for a building that has structural issues. also, regarding the phonetic alphabet: delta delta sierra tango romeo uniform charlie tango uniform romeo alpha lima at YaH00.C0m. I would be interested in seeing some example contracts.
thanks

 

[a2mfk]

A couple of tries both got bounced back and I double checked myself to make sure I was not having a brain fart... no punctuation in between the military code?

certainly someone could come up with a way we could exchange email addresses securely if we wanted to...

 

[DWHA]

a2mfk - Got it, I responded also.

 

[Brad805]

I suggest you discuss the lack of liability insurance with the Bank. I suspect they will decline your offer. Keep in mind their reason for request an inspections is to protect their investment for some period of time. If you make a mistake, they usually want some means of re-course.

We have standard liability limitation clauses and time limits and the only clients that usually want to negotiate these aspects are corporate clients such as banks.

Brad

 

[DWHA]

Brad,

I plan on discussing the liability issue with the bank. But I want to have all of my paperwork prepared prior to this discussion.

This situation came up because I know a board member of the bank. He approached me about doing this work on occasions (a couple of times a year). He is giving me a copy of one that was done in the past by another engineer. I personally know the other engineer, he worked at the company I used to work for. I know the other engineer did the work on the side and did not have any liability insurance either. So, I am not sure how strict they are going to be about the liability issue. But I appreciate the insite.

 

[Ron]

DWHA...let's make a couple of assumptions...
1. You are in the US
2. You are in a state that requires an SE

There are standards for property condition assessments, to include the structural components. This particular standard for banks and real estate transactions is ASTM E 2018 "Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process". This standard outlines all of the VISUAL assessment and is intended to be a non-intrusive, nondestructive assessment. Its compliance is essentially the standard of care for such inspections.

You can go a bit further and use ASCE 11-99 "Guideline for Structural Condition Assessment of Existing Buildings". This one is a bit more rigorous than the ASTM standard.

Do you need insurance? IMO, yes. Most banks will require it.

Make sure, as others have noted, that appropriate caveats are in place in your report. Be sure to note anything that was not accessible and anything you could not see. If you see something that might be indicative of structural distress (cracking, deflection, distortion, etc.) be sure to warn and request further investigation (since it would not be included in a visual assessment scope of services).

Don't let your client write your report....I'm sure they would like to, but resist the urge to please them just because they are your client. Tell it like it is.

 

[DWHA]

Ron,

You are correct, US & SE

I will review the "Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process"

Thanks

And, the client will not have any influence on the outcome of the reports.