Carefully Consider Joint Venture Coverage Before Beginning Work
One of the things that is common to all engineers, architects, or consultants is the need for professional liability insurance. With this type of insurance, the professional does not have to worry about being affected by law suits that can happen when something goes wrong. There could have been negligence, omissions, or misleading statements made, but with liability insurance coverage, the professional is excluded from liability. One of the common attachments to this type of policy is the joint venture coverage.
This coverage is something that is sort of an umbrella policy that an insurance policy provides, but there are limitations. When several consultants, or engineers, begin to collaborate on a project, they are each protected to a certain degree. The problem occurs when the individual policies interfere with the join venture coverage.
On some occasions a silent joint venture is created which is basically just a piece of paper that is signed by parties, but never filed with any agency. The problem with this type of venture is that only one person is covered by the protection. It is much better for each of the individual professionals to procure their own liability insurance with a joint venture exclusion included.
This exclusion is what will kick in if the need arises. If, for example, the joint venture is designing a new truss for a large building and it collapses, they will be liable, as a whole, for the damages incurred. However, with the joint venture coverage option on their individual policies, each person will be covered.
Before entering into any type of joint venture project, it is important for each of the people involved to check their individual professional liability insurance policies to make sure that there is adequate joint venture coverage. The extra cost of the policy is an investment in the success of the project and all parties involved.