Insurance Matters

Purpose

It is important that all professionals obtain some level of insurance, regardless of the industry in which they work. Insurance protects individual’s reputations and creditability as a working professional. As well, defending your name can be expensive and it is important you understand your rights.Insurance is also important for those looking to build or possibly further their careers. Obtaining insurance through a recognized association can assist members in securing additional employment, as many potential clients and employers find the fact that members who are insured provide an advantage over those who are not insured. Insurance also allows you to secure your qualifications and build your business, as it protects your net assets and wealth that you have accumulated over your lifetime.


Risks

There are three main streams of law that provide a means of assessing risk, which are breach of contract, liability in tort, and breach of fiduciary duty. ASTTBC encourages that all of its members make sure that any agreement is expressed through a written contract, which is a voluntary agreement that is intended to create legally binding obligations and can be enforced in a court of law. ASTTBC provides material that may assist members in arriving at a suitable contract. The two most common torts alleged against a professional are negligence and negligent misrepresentation. Allegations of negligence are likely to be made by clients of ASTTBC members, while claims of negligent misrepresentation are more likely to be made by non-clients. Negligence in a professional context requires an error or omission on the part of the professional that causes damages to a client, or possibly a non-client. Negligence is indicated when the professionals work falls below the standard of care required under the given circumstances.

A fiduciary relationship arises when one person can exercise some discretion or power over another person. The power can be exercised unilaterally to affect the beneficiary’s position, and the beneficiary is in a vulnerable position with respect to the fiduciary holding the power. The essential quality of a fiduciary relationship is loyalty. The beneficiary is entitled to the single-minded loyalty of his/her fiduciary.


Types of Insurance

ASTTBC makes available to its members through Willis Towers Watson, Errors and Omissions Insurance, Commercial General Liability Insurance.

Errors and Omissions Insurance is specific towards a professional setting, and protects the individual from any event where he/she failed to do something that a typical professional within their field would consider wrong.

Commercial General Liability Insurance protects the individual in the event that he/she is held accountable for any damages arising from a wrongful act that did not require the exercise of their professional skill. Typically this would insure against damages relating to bodily harm, property damage or economic loss.


Who Should Be Insured

ASTTBC highly recommends that all members obtain Errors and Omissions Insurance throughout the entirety of their career, and Commercial General Liability Insurance where appropriate. In many cases professionals may be held personally liable for wrongful acts they commit and it is important that they are covered. We find that members who operate in private practice do purchase at least Error and Omissions Insurance. Members who are employed through an alternative organization should obtain confirmation from their employer that they are covered through their corporate error and omission policy. In the event that the member leaves the employer they should request written confirmation that they had no claims against them during their period of employment, which should be clearly stated in the letter. ASTTBC’s program offers access to personal coverage for any member who is employed in industry or government at a minimal cost. If you have concerns about your personal liability exposure you should discuss this with the Willis Towers Watson team.


Who Requires Insurance

It is highly recommended that all members of ASTTBC obtain insurance. Members are often involved in extremely important and complex projects, and that even if you have made a mistake you can still be sued. Being insured through ASTTBC’s Insurance and Risk Management Program will cover your legal fees, and protect you and your business from potentially crippling costs. The minimum amount of coverage for an ASTTBC member is $250,000, but can go as high as $5,000,000 or more.

Members who are Certified House Inspectors they are required by law to obtain coverage of at least $1,000,000. The price of insurance is assessed on an individual basis, and is determined by factors such as income, limit, size of the job and number of employees.

Members who seek coverage under the ASTTBC Insurance and Risk Management Program who are offering, directly to the public, services normal to a technical specialist discipline must be certified in the appropriate discipline by ASTTBC before access to such coverage is granted. This means that ASTTBC members who are registered as either a AScT or CTech must also hold certification as a ‘technical specialist’ if they are offering services in one of the following 10 disciplines, building design, construction safety, electrical work practitioner, fire protection inspection and testing, house and property inspection, public works inspection, onsite wastewater, site improvements surveying, steel detailing and underground utility locating.


Why Should an ASTTBC Member Obtain Insurance

Members of ASTTBC should obtain insurance for several reasons. First, members may enter into contracts with clients that require them to carry some level of insurance. In this case it is important that all contract documents be carefully reviewed as failure to comply with insurance requirements may lead to additional damages. Second, some professionals may be exposed to the potential of a Criminal Negligence action, which could result in substantial fines or imprisonment. The policy provided by ENCON as part of the ASTTBC Insurance and Risk Management Program will assure that the member can afford a defense. Finally, members may be exposed to ‘Joint and Several Liability’, which allows an injured party to recover in full from any party who caused them loss even if the party was held only partially to blame.