Can you be sued at anytime for just about any action or even inaction?
Are you likely to be sued?
No. But, if you are sued and have no liability insurance you could easily go broke defending yourself.
Needs assessmentEveryone should carry various forms of liability insurance. Now ask yourself: "How much liability insurance do I need, and can I afford?"
If you are an employee, your employer's liability insurance probably covers you. You probably assume as an employee that you have full liability coverage, but this may not always be the case. Especially in smaller firms there is a possibility that the limits of coverage or the types of coverage may leave you vulnerable if your employer and its agents (such as yourself) are sued. Check to be sure that you are adequately protected. Look for proof, not mere words.
If you run your own EHS consulting business, it's becoming increasingly difficult to get work without showing proof of adequate insurance coverage.
Professional liability insurance provides coverage for errors and omissions, libel and slander, negligence, and similar issues. If you conduct a safety audit and miss an unguarded machine, which someone subsequently is injured on, professional liability insurance will help you.
General liability insurance provides coverage for issues such as bodily injury and property damage. If you were to lay your clipboard down on the floor while conducting a safety audit, which someone subsequently steps on and gets injured, this is where general liability insurance kicks in.
How much does it cost?Costs for liability insurance are specific to an individual or business, and the amount and type of EHS work performed. You can get a free quote for the cost of coverage you desire, but you'll first need to submit an application and supporting documentation (such as your resume).
The lowest cost for both professional liability and general liability insurance, for an EHS pro doing part-time work in normal risk areas, is about a $1,000 annual premium for a million dollars of coverage (per claim and aggregate) and a fairly high deductible (such as $2,500). Million-dollar coverage appears to be the norm.
If you're doing EHS work full-time as a consultant, annual premium costs for liability insurance climb much higher depending upon your perceived risk. If you have been sued in this area before, rates go higher. An "average" independent safety and health consultant with a clean slate should look to pay about a $3,000 annual premium to obtain a million-dollar coverage for both professional and general liability insurance.
Environmental work, especially any type of remediation, will cause costs for liability insurance to soar. Annual premiums exceeding $10,000-$20,000 are possible. One reason is that you may need to carry several million dollars of coverage to be adequately protected.
Membership benefitsMany associations within the EHS field have established relationships with insurance firms (brokers and agents) to help their members find and obtain liability insurance at discounted prices. For example:
- Campania Management (800-831-9506) services members of the Academy of Certified Hazardous Materials Managers;
- Seabury and Smith (800-448-9729) services members of the American Industrial Hygiene Association; and,
- Complete Equity Markets, Inc.(800-323-6234) services American Society of Safety Engineers members.
How much of a discount do association members receive? Dennis Santoli of Campania Management says that all other things being equal, a person with the CHMM credential will get a 10 to 25 percent better deal on liability insurance than a person without credentials.
Seek expert helpInsurance is a complex field that uses its own language similar to the legal profession. If you're looking for liability insurance, or for that matter other types of business insurance (such as coverage for vehicles used for work), ask the experts. Dennis Santoli of Campania Management and Melanie Martz from Complete Equity Markets were very helpful in answering my insurance questions for this article.
By Dan Markiewicz, MS, CIH, CSP, CHMM. Dan is an independent environmental health and safety consultant. He can be reached at (419) 382- 0132, or by email at email@example.com.