Not logged inAmerican Welding Society Forum
Forum AWS Website Help Search Login
Up Topic Welding Industry / Inspection & Qualification / Insurance for CWI contract work?
- - By bmaas1 (***) Date 08-11-2017 01:49
Does anyone have information on what type of insurance to carry for a contract inspector? Would GL be sufficient? Visual inspection only. No NDT. I don't think Error and Omission is applicable since I will not be consulting. I am also looking for carriers as well. Any help would be greatly appreciated.

Parent - - By welderbrent (*****) Date 08-11-2017 03:24
It will all depend upon the exact nature of the work, the Customer, the Contract Documents and some other variables. 

I carry E&O for all my TPI work.  Some of my customers demand it, others prefer it, and some don't have a clue so don't care.

On a technical view of it, regardless of the customer requirements, if anything EVER happens where you end up in court, you are far better off with Professional Services E&O than just GL. 

In addition to that, many job sites will not let you on without Workers Comp, Job Site Hired Auto, medical, and some other riders. 

Finally, your coverage limits will need to be at least 1 mil.  2 is better.  Some will require 5 but those are pretty big jobs and often the inspectors can talk their way down to their normal policy since they aren't the ones actually performing any of the work on the project. 

He Is In Control, Have a Great Day,  Brent
Parent - - By bmaas1 (***) Date 08-11-2017 13:23
TPI work?
Parent - - By jwright650 (*****) Date 08-11-2017 14:40
Third Party Inspection
Parent - - By bmaas1 (***) Date 08-11-2017 18:53
Oh duh lol
Parent - - By bmaas1 (***) Date 08-12-2017 18:39 Edited 08-12-2017 18:41
I am thinking right now GL would be sufficient. EO seems just too high for premiums. Right now I don't have a company that requires it or cares. I am sure that will change at some point. To start off with I do job shop and fab shop work at the moment. No immediate plans to do jobsite work at this time.
Parent - By welderbrent (*****) Date 08-12-2017 22:24
Here is the question you need to ask your agent:  What does GL cover?  If ANYTHING happens will it help me?  Or, am I just wasting my money? 

Why have insurance at all if it is not going to do what is needed when crunch time comes?  So, if you aren't going to get E&O, why have any? 

Not being sarcastic, trying to make a point.  You really need to work out the details with your agent.  They will contact the underwriter if they don't know. 

Insurance just to have insurance is definitely a waste of money. 

You are right, it is expensive.  I pay more per month than many of my peers do per year.  But, besides the E&O, most of them don't carry Workers Comp on themselves and don't even know what job site auto is.  So, they are not really covered for anything.  They wouldn't even get a look at on many of the jobs we do. 

Parent - - By thirdeye (***) Date 08-13-2017 17:47
You know, I read this reply yesterday, but my reply would have been similar to Brent's suggestion of visiting with your agent to get specific examples of protection a commercial GL policy provides. Common examples are a customer (or other visitor) getting hurt on your premises.  Or damage an employee might do, or injury they might inflict on someone else while working on a job-site or in a customers shop. 

I can only offer two examples in my business that would have been a GL issue in over 40 years in business.  One was an employee knocking over an oxygen cylinder in a customers shop... the regulator sheared off and the bottle took off like a torpedo and was sort of wedged in a corner of the building while it vented.  The customer, realizing that the bottle should have been secured, and that something worse could have happened, put all the blame on improper storage.  The second incident involved me, I was on a job-site and hit a patch of ice and slid a 1-ton 4X4 truck (with cow catcher) into the corner of a building. No damage what so ever to the truck.  I did know the owners personally, and had done work for them for 20 years at that time so the agreement we came to was to have the damage repaired and my company would show a "discount" on the next months invoice to cover the repair costs (which were less than the deductable), so it worked out fine.  It's possible the liability would have been jointly shared with my commercial auto carrier, but it was on private property and the truck was being used in the performance of business activity, so the auto carrier might have declined.
Parent - - By bmaas1 (***) Date 08-13-2017 19:42
I think my hangup is the EO insurance. Whether for what I really do would it be necessary? THe only thing that remotely comes close to consulting or consulting on this would be developing a WPS for the company.
Parent - By thirdeye (***) Date 08-13-2017 22:57
Well again, visit with your agent and be as specific as possible when describing your services. They might be able to steer you into a E&O policy that is more reasonably priced than a company that has more risk associated with their profession.

E&O is another layer of protection. For the most part a GL policy excludes your actual work.  Licenced professionals like a professional engineer, an electrician, a plumber for example have certain exposures related to the expected quality of their work, or a mistake in their work. Any of these would benefit from E&O coverage.  An inspector is caught in the middle as we don't actually perform "work" in terms of producing a product, or perform "work" on a product like a welder that changes some piping in a refinery.

Our profession is not common and usually does not have a standard risk factored in, so an underwriter has to decide where to place us.  Inspectors usually don't usually direct work, make recommendations or even offer an opinion, which lowers liability.  Inspectors gather information and report findings which are in accordance with recognized standards, codes, specifications etc. ... and these things lessen your liability as well.   Inspectors have various levels of certifications, usually perform work to customer approved written procedures, and may have strong disclaimers on their reports, contracts etc.,... all of these things lessen or re-direct liabilities back to the manufacturer or client. Many years ago our corporate lawyer advised against calling any services "consulting" or any inspectors "consultants" as that can increase liability as that implies you are an expert who is advising someone to take a particular action.  I don't know if that still holds true or not.
Parent - - By welderbrent (*****) Date 08-13-2017 23:40
So, we started off answering a question about liability insurance for a Contract Inspector.  Then, we went to mainly doing shop fab work.  It would appear one or the other is what you really want to do because if you want to do Contract Inspections, the other welding shops won't want you in their shops or on their field jobs which will become obvious when you reject aspects of their work and they tell the local building authority having jurisdiction that you have a conflict of interest and are hard on them because they are your competition. 

If you are going to be involved AT ALL in inspections you need to have the correct insurance.  Been there, done that.  Still have the welding shop but I don't do hardly any structural work anymore.  We do almost all inspections work.  Special Inspections, Verification Inspections,  Procedure Development, Welder Certifications, etc.

And the advice about being a 'consultant'.  Beware what you do and say and how you describe yourself and your services.  Even if 'consulting' sounds like the right most descriptive word, use great care in using it. 

Back to the chain of posts, if you are ONLY doing shop fab, then GL is satisfactory.  But, if you are doing ANY inspections work, sure, you can say you have insurance. But saying it and being covered if anything goes wrong are two different things. 

He Is In Control, Have a Great Day,  Brent
Parent - - By bmaas1 (***) Date 08-14-2017 01:10
Got it. Thanks.
Parent - - By jwright650 (*****) Date 08-14-2017 11:11 Edited 08-14-2017 16:42
What I found is that the insurance agents tend to freak out when you ask about insurance coverage regarding anything that involves welding, cutting or general use of extreme heat to join materials. They have a hard time understanding that welding inspectors don't always weld on the job, they just inspect what others have welded. It's hard to get them to see the whole picture, they have this general idea in their mind and it's hard to help them understand what it is that we do. Connotations of a guy holding a "blow torch" is the norm.
Parent - By bmaas1 (***) Date 08-14-2017 14:28
Lol I can understand that.
Parent - - By thirdeye (***) Date 08-14-2017 16:37
John, you also have to very precise with the terms. Early in my career my business partner did not notice that an underwriter had classified us under "oil & gas well testing" instead of "oil & gas weld testing" and we did not realize how much we were over-paying until we went out to bids to other agencies.  Well testing would have been a category for a company like Halliburton or Schlumberger that work on live oil and gas wells, not new pipeline construction like we were doing at the time.  Later on our percentage of oil & gas work fell below 50%, so the classification was changed to something like "general welding quality inspection" and the rates fell even lower.
Parent - - By bmaas1 (***) Date 08-14-2017 22:49
I wonder if they have to "create" categories so it can be more specific to what people do.
Parent - By thirdeye (***) Date 08-15-2017 18:17
Not sure if underwriters create a new category as they would have to come up with a description and more importantly assign a risk assessment to it.  I believe they look at their options and see what the best fit is, then calculate the premium based on annual income.   I can tell you that my state unemployment and workers comp department has a different interpretation of my business and classifies it as something like "Engineering Services - Other".
Up Topic Welding Industry / Inspection & Qualification / Insurance for CWI contract work?

Powered by mwForum 2.29.2 © 1999-2013 Markus Wichitill