[RE-wrenches] Insurance for solar design and inspections

[William Miller]

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

CA Lic. 773985





*From:* RE-wrenches [mailto:re-wrenches-bounces at 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



-- 

[image: 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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