Figuring out which insurance/license do i need (if any) on my future business

[GS34]

Hi all,

I'm planning to open a business which simply consists on CAD'in pen markups into 2D construction drawing for construction and engineering companies. I would'nt be designing only drafting those companies designs.

My big question mark is, as i'm not designing do i need any type of construction related insurance/license?


Thanks in advance.

 

[Scalloway]

I would suggest Professional Indemnity Insurance in case a client has a problem using your work.

 

[Bob Morgan]

Definitely Professional Indemnity - Some of your Client Companies will be insisting on it

 

[Frank the Insurance guy]

Hi all,

I'm planning to open a business which simply consists on CAD'in pen markups into 2D construction drawing for construction and engineering companies. I would'nt be designing only drafting those companies designs.

My big question mark is, as i'm not designing do i need any type of construction related insurance/license?


Thanks in advance.

Hi @GS34

If someone is paying you to only provides "drafts", I assume they are using you for the benefit of your skills/experience. As such they will have some expectations as to the quality of your drafts.

Insurance is not compulsory (other than Employers Liability), therefore the choice is yours.

As suggested by others above, we would recommend you look at Professional indemnity Insurance - It looks like your biggest risk is a claim from your client for compensation where they have lost out financially as a result of some errors in the drafting.

Appreciate you are only providing drafts, so assume that your clients will then employ other professionals for final designs - Therefore the insurance premiums should be low to reflect that the reduced risk.

 

[Bob Morgan]

Hi @GS34

If someone is paying you to only provides "drafts", I assume they are using you for the benefit of your skills/experience. As such they will have some expectations as to the quality of your drafts.

Insurance is not compulsory (other than Employers Liability), therefore the choice is yours.

As suggested by others above, we would recommend you look at Professional indemnity Insurance - It looks like your biggest risk is a claim from your client for compensation where they have lost out financially as a result of some errors in the drafting.

Appreciate you are only providing drafts, so assume that your clients will then employ other professionals for final designs - Therefore the insurance premiums should be low to reflect that the reduced risk.

'Drafting' as in Drawing! He's preparing drawings for construction!

 

[Frank the Insurance guy]

'Drafting' as in Drawing! He's preparing drawings for construction!

Sorry, misundestood his post (bit early on a Monday morning!) - They should definitely consider Professional Indemnity Insurance!

 

[GS34]

Thanks all for the for answers above. Seems clear it would be worth to have the Professional indemnity Insurance.

Would it be worth it to have a Professional Indemnity as well?

Also, which terms should I use to calculate the level of cover needed on the Professional Indemnity Insurance?

(I have a rough idea of the value of the projects I would be involved in.)

 

[Frank the Insurance guy]

In terms of Level if Professional Indemnity Insurance, buy a level of cover that you are able to afford and are comfortable with.

I suggest you look at the contracts/projects your are involved - what could be the financial loss to your client's if something went wrong? Worse case, would the development does not get completed at all - they could come to you for all their costs and if it was a commercial project that then leads to the client losing revenue they could pursue you for the loss.

As an extreme example - you are asked to provide drafts for a new hotel. You make a mistake that somehow results in the project not going ahead at all - you could be sued for not only the financial loss the client has already incurred, but also the financial losses from the lack of hotel revenue!

 

[Bob Morgan]

Be VERY careful when you have PII cover. If a prospective client's first question is "What PI Cover do you have?" - Walk away, smartly!

 

[GS34]

That's interesting,

To be more clear, in my particular case the drawings i would be producing wouldn't be for proper 'construction' such as Structural or Architectural disciplines. Would only be working on Building Services Engineering drawings (HVAC, Lighting, Power etc.) on projects that would never exceed £250k in value.

PS: On my previous comment i was meant to ask if a 'Public Liability' cover would be beneficial aswell.

 

[Frank the Insurance guy]

Would only be working on Building Services Engineering drawings (HVAC, Lighting, Power etc.) on projects that would never exceed £250k in value.

Your customer would still be relying on your drawings.

The project value can sometimes be a red herring as to the potential financial loss and the amount of a claim against you. You need to consider the financial impact to the client of something going wrong.

If you were to provide HVAC drawing for a project for the Comms room of a large IT Company - project value may only be £250K, but if something was wrong with the drawings that resulting in the total loss of use of the comms room, you could be sued for all the income the client has lost as a result of not have a comms room!

PS: On my previous comment i was meant to ask if a 'Public Liability' cover would be beneficial aswell.

Public Liability is for claims where you cause physical loss or damage or injury to others and their property. Its up to you if you feel th eneed to have this cover. There is little risk of such a claim and therefore insurance should be available for less than £100 per year for a limit of £1m or £2m.