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Error & Omissions Insurance.
- Thread starter John12
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- Jan 1, 2000
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Like most things, if it is not in writing, it does not exist. Note that, even if it IS in writing it might not exist, either...
While I understand why you might like to know if a hired expert has E & O, it does not relieve you of the necessity of checking his former clients for references. Check the references ( esp those NOT given to you by the surveyor, but others who know him )
While I understand why you might like to know if a hired expert has E & O, it does not relieve you of the necessity of checking his former clients for references. Check the references ( esp those NOT given to you by the surveyor, but others who know him )
I certainly would not count on any insurance which a surveyor had, protecting the client or buyer of the boat. I had an incident about 10 years ago, when the surveyor missed multiple problems, which had been obvious to another surveyor--and to a friend of mine who withing 30 seconds of stepping aboard, asked if the boat had been sunk. Some of these issues were things which I specifically asked about: items missed included delaminated teak venier plywood from water intrusion, a water tank which had been broken, and "patched" with epoxy and glass, a strut which had been driven thru the bottom of the boat, and improperly repaired, mud in the foreward bilge, partial electronics, with corroded wiring, multiple large gel coat and laminate repairs, etc. His organization said that any insurance only protected the surveyor for his legal defense cost--and that the organization would only take action against the surveyor, if I had a judgement in a court of law. This is despite a copy of a written survey by another surveyor, whose client had rejected the boat for "cause" only a month before--conclusion was that the boat had been sunk and damaged. I was later able to ascertain the circumstances of the wreck, and the vessel being dropped when it was retrieved from the rocks.
There is no such thing as Error & Omission insurance for surveyors. All SAMS members have liability coverage. If a surveyor overlooks something in most cases the fee will be refunded to some degree. A marine survey, is not a warranty! Hire a good surveyor and your chances of having a problem will be slim to none.
Al, do you need to rethink that? I know of many NAMS surveyors that carry E&O. You cannot do "Trip Under Own Power" or "Trip in Tow" surveys for major underwriters/P&I Clubs or Oil Companies with out a vaild E&O policy.
L.Keith,
I have never had the need, to consider the coverage i have. My understanding of the policy includes injury or Legal Liability.
This is the way it reads: US $1,000.000 any one accident and/or occurrence and in the aggregate. (Including coverage under U.S. Oil Pollution Buyback Clause#CU96B1.)
This is a good question and there maybe more to the policy then i know. I do know the deductible is $2500.00 for any one accident and / or occurrence.
looks like i need to do a little homework on this one. Ill get back when i know more.
I have never had the need, to consider the coverage i have. My understanding of the policy includes injury or Legal Liability.
This is the way it reads: US $1,000.000 any one accident and/or occurrence and in the aggregate. (Including coverage under U.S. Oil Pollution Buyback Clause#CU96B1.)
This is a good question and there maybe more to the policy then i know. I do know the deductible is $2500.00 for any one accident and / or occurrence.
looks like i need to do a little homework on this one. Ill get back when i know more.
I would think you would want some sort of malpractice coverage if for some reason you "missed" something which turned out to be a real problem. Say the boat was cracked up and repaired. It was a good looking repair and the surveyor didn't notice it. Then something happens. My guess would be that the lawyers would look to the builder (if around), the service/repair yards, and any surveyors involved. You would at least want a policy to cover your defense costs. Just a guess, imo. Good luck.
eGolfman25, Thanks for posting.. Legal Liability covers that. But there could be question as to who is responsible for what. As you stated it could go in many directions. Most surveyors and marine professionals are contracted before any service is performed. As far as missing something, if the surveyor is performing a pre-purchase survey There is very little room for that. Like ive said time after time. Know who your dealing with. Most people spend many hours finding the right boat. Why not spend a good bit of time picking the right surveyor for the job.
quote:
Originally posted by Al_Prisco
There is no such thing as Error & Omission insurance for surveyors. All SAMS members have liability coverage. If a surveyor overlooks something in most cases the fee will be refunded to some degree. A marine survey, is not a warranty! Hire a good surveyor and your chances of having a problem will be slim to none.
Al.. I beg to differ. Many do carry E&O coverage. In fact joining any organization outside of the US requires a copy of your E&O policy. But then again even with E&O coverage I would never touch a boat without a proper legal agreement with my customer. We live in a world where everyone wants to litigate against everyone else. I purchase all of my insurance every year. If you paid below 17-18 dollars a foot you can bet they don't have adequate coverage. Its a business, proper insurance has a cost. BTW for those who don't know. E&O and general liability only pay for things you are found liable for. You can claim yourself liable or a court can find you liable. Simply because you found something wrong on a survey does not give you the ability to file a claim against a surveyors insurance company GL or E&O... Also I ask this.. If the surveyor is guilty what difference does insurance make. He is still liable and you can get a judgment in court.
I had one customer call me 5 months after a survey claiming I was responsible for a leaky fuel tank he had just found leaking into the bilge. I pointed out the portion covering the fuel tanks, and the corrosion observed during the survey. His comment.. I will see you in court. Which never happened.. Like I said everyone wants to sue.. and get the insurance company to pay for something.. Fred
Your wrong Al, if you miss something liability does not cover it. SAMS liability covers (you) if someone falls on the screwdriver you left on the floor or if you knock over the Ming Vase that they have in the cabin.
Gary Washienko AMS
Sound Marine Survey
Mamaroneck, N.Y.
Gary Washienko AMS
Sound Marine Survey
Mamaroneck, N.Y.
Fred and Gary,
Thank you for your input, and pointing out the limits of liability coverage offered by SAMS.
Like i said, im not sure as to what is covered by the SAMS Policy.
Do either of you have Error & Omission coverage? If so what company do you use? I guess one can never be to prepared. I myself have never had an issue with a client when it comes to an oversite that led to a legal judgment.
I also contract with my clients prior to performing a survey and add comments to my reports to protect myself against these type issues. As im sure most do.
Thank you for your input, and pointing out the limits of liability coverage offered by SAMS.
Like i said, im not sure as to what is covered by the SAMS Policy.
Do either of you have Error & Omission coverage? If so what company do you use? I guess one can never be to prepared. I myself have never had an issue with a client when it comes to an oversite that led to a legal judgment.
I also contract with my clients prior to performing a survey and add comments to my reports to protect myself against these type issues. As im sure most do.
It's rediculous anyway. You can't pay a guy a few hundred bucks to give you a "warranty" for an object worth hundreds of thousands or more. You pay him for his opinion. Could be his opinion is crap, but that's all you paid him for. That and the fact that he actually did the things he said he did. I would think if you sued him, insurance or not, you might very well prevail if you were to spend thousands proving that his opnion was in fact, crap. As a reward they might even give you back his fee, which is all you paid for.
Just asking the question gives me pause as to what you are looking to achieve with a surveyor. Quite honestly, I don't care if the surveyor has errors and omissions insurance, it won't mean squat since you have a very very large uphill battle trying to prove that instead of a survey, you were actually trying to contract for a warranty.
As much as we would all like, we can't farm out our own responsibilities, even if most of the world today seems to believe that we can.
Just asking the question gives me pause as to what you are looking to achieve with a surveyor. Quite honestly, I don't care if the surveyor has errors and omissions insurance, it won't mean squat since you have a very very large uphill battle trying to prove that instead of a survey, you were actually trying to contract for a warranty.
As much as we would all like, we can't farm out our own responsibilities, even if most of the world today seems to believe that we can.
Brett,
Talk about being spot on, you have hit your buoy exactly on course. You could not be more correct with your assessment. It is usually the more experienced yachtsmen that understand that concept though.
Of course, if a surveyor ends up in court trying to defend his opinion by a suit-happy boat buyer, then his best odds at any time are 50/50. So, are the odds worth purchasing E & O? Only the individual surveyor can make that judgment for himself.
Talk about being spot on, you have hit your buoy exactly on course. You could not be more correct with your assessment. It is usually the more experienced yachtsmen that understand that concept though.
Of course, if a surveyor ends up in court trying to defend his opinion by a suit-happy boat buyer, then his best odds at any time are 50/50. So, are the odds worth purchasing E & O? Only the individual surveyor can make that judgment for himself.
If you hire a professional (surveyor) to survey your boat there is an expectation that he will due his do diligence to uncover potential problems, it is further understood that as professional in this field he has the background, knowledge, and resources to know what to look for in the boat being surveyed.
With that said, a surveyor does not have x-ray vision or a crystal ball, in other words, he can not see into the future, the short instance in time that you hire him for is just that, he can only see what he sees at that time.
Errors of omission (EO) is something I know real well, EO will not cover gross negligence (GN). An example of GN in the boating industry would be:
XYX boat is known to have a stringer problem, the survey does not address that, furthermore the boat was never surveyed for that problem. Hull just cracked because of stringer problem. That is gross negligence, no insurance will cover that.
XYX boat is known to have a stringer problem; the survey does not address that, but notes customer did not want a full depth survey of the hull, because of ABC, EO will cover that.
Or XYX boat only wanted an ABC survey; based on the ABC survey we find the following….
So, point is if you hire the right surveyor, and pay for the right survey, you will have recourse if the surveyor makes a mistake, EO is good protection for the surveyor that did everything right, and had a properly worded agreement. EO, does not cover gross negligence.
With that said, a surveyor does not have x-ray vision or a crystal ball, in other words, he can not see into the future, the short instance in time that you hire him for is just that, he can only see what he sees at that time.
Errors of omission (EO) is something I know real well, EO will not cover gross negligence (GN). An example of GN in the boating industry would be:
XYX boat is known to have a stringer problem, the survey does not address that, furthermore the boat was never surveyed for that problem. Hull just cracked because of stringer problem. That is gross negligence, no insurance will cover that.
XYX boat is known to have a stringer problem; the survey does not address that, but notes customer did not want a full depth survey of the hull, because of ABC, EO will cover that.
Or XYX boat only wanted an ABC survey; based on the ABC survey we find the following….
So, point is if you hire the right surveyor, and pay for the right survey, you will have recourse if the surveyor makes a mistake, EO is good protection for the surveyor that did everything right, and had a properly worded agreement. EO, does not cover gross negligence.
Let's say I spend a few hundred bucks to have a professional look at a boat and give his opinion. He looks at it and writes a report. Everything for the most part is good. The day after I buy it there is an issue. This issue is one that 99% of other surveyors would have caught. I did not buy a warranty when I paid this guy. I paid him to look for problems/issues. Each and every other surveyor would have seen this issue. One of two things occurred. The surveyor was incompetent or he never really did a survey. On the other hand if he did look at the vessel and did not find a problem (and neither would most other surveyors) then there is no beef. What is in question is when there is something obvious that even a non-professional would see. You are paying for more than an opinion; you are paying for an inspection and an inspection to the little things.
mandm1200, I think in the instance you noted, that you would absolutely be entitled to get your money back for the survey.
But, that's not what you are after now is it?
Walter, I think its a big leap to expect that a professional surveyor is qualified for every boat they look at. Especially with boats, I bet it is very common practice for a highly experienced, well qualified surveyor to find himself looking at a boat he has never seen before. Is he qualified to make engineering (stringer) evaluations, not being an engineer and also not having the experience of having seen that particular boat before? I'm just saying that if you get into a court case, the reality is that its probably very easy to demonstrate that even "qualified" opinions are frequently wrong in this industry. By extension then, most surveys have errors (every single one of the ones I've look at have, at least minor ones), that is common place and that unless there was gross negligence, that the purchaser of the survey likely received usual and customary value. To say that the surveyor is going to be liable for replacement of fuel tanks or similar, I just don't think its reasonable to belive that any of us are going to be able to achieve that in any typical situation.
That said, I personally still believe in the value of good surveyors.
Lest any of you think I don't have skin in the game. Some might recall my first real boat, the 23 Penn Yan. I had an engine guy come out and go over the engine. He wrote up findings and gave the "all's well". He had noted moisture in the rear cylinders, but did not think it was a big problem. Knowing what I know know, that was a huge red flag that the risers were rotten. I didn't know enough then to get somebody worth having. Credentials frankly are meaningless. Sure enough, first real day out on the boat after purchasing, day 2, the engine craps out. We pull the heads and all is revealed, 8K later I have a boat running with a fresh rebuild. The boat only cost me 7,500. Do you really think I could have sued the mechanic and got anything but his fee back. Lets say its his fee *3, it still is not worth the time to pursue.
So, yeah, the "day after I buy it" stories are not just examples. They happen. I've got plenty of skin in the game. All that and I still say you are barking up the wrong tree.
Just my opinion though. You don't need my agreement. If somebody can win one of these suits AND not put an end to the surveying industry as we know it, more power to you. If surveyors do end up being liable for these kinds of things, few of us will be able to afford one.
Do the math and the whole idea is a non starter. You have to take responsiblity for your decisions, even if you do farm out the work. That's why you get references and at least know enough to determine whether you got your money's worth from the survey. If you don't think you can do that, then hire surveyor to survey the surveyor. It's your money. Be wise.
But, that's not what you are after now is it?
Walter, I think its a big leap to expect that a professional surveyor is qualified for every boat they look at. Especially with boats, I bet it is very common practice for a highly experienced, well qualified surveyor to find himself looking at a boat he has never seen before. Is he qualified to make engineering (stringer) evaluations, not being an engineer and also not having the experience of having seen that particular boat before? I'm just saying that if you get into a court case, the reality is that its probably very easy to demonstrate that even "qualified" opinions are frequently wrong in this industry. By extension then, most surveys have errors (every single one of the ones I've look at have, at least minor ones), that is common place and that unless there was gross negligence, that the purchaser of the survey likely received usual and customary value. To say that the surveyor is going to be liable for replacement of fuel tanks or similar, I just don't think its reasonable to belive that any of us are going to be able to achieve that in any typical situation.
That said, I personally still believe in the value of good surveyors.
Lest any of you think I don't have skin in the game. Some might recall my first real boat, the 23 Penn Yan. I had an engine guy come out and go over the engine. He wrote up findings and gave the "all's well". He had noted moisture in the rear cylinders, but did not think it was a big problem. Knowing what I know know, that was a huge red flag that the risers were rotten. I didn't know enough then to get somebody worth having. Credentials frankly are meaningless. Sure enough, first real day out on the boat after purchasing, day 2, the engine craps out. We pull the heads and all is revealed, 8K later I have a boat running with a fresh rebuild. The boat only cost me 7,500. Do you really think I could have sued the mechanic and got anything but his fee back. Lets say its his fee *3, it still is not worth the time to pursue.
So, yeah, the "day after I buy it" stories are not just examples. They happen. I've got plenty of skin in the game. All that and I still say you are barking up the wrong tree.
Just my opinion though. You don't need my agreement. If somebody can win one of these suits AND not put an end to the surveying industry as we know it, more power to you. If surveyors do end up being liable for these kinds of things, few of us will be able to afford one.
Do the math and the whole idea is a non starter. You have to take responsiblity for your decisions, even if you do farm out the work. That's why you get references and at least know enough to determine whether you got your money's worth from the survey. If you don't think you can do that, then hire surveyor to survey the surveyor. It's your money. Be wise.