[RE-wrenches] Insurance for solar design and inspections

Mon Mar 11 18:41:24 PDT 2024

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 at 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
>
> 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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