Moonlighting Engineers: The Consultant Stands Alone

by Denise K. Gibson

“Ron” couldn’t wait to get started. A friend had recommended him to provide the power engineering services in a hotel renovation project.

Ron cleared the moonlighting project with his current boss and tackled the project almost every evening and weekend. When the hotel renovation was finally finished, Ron started getting calls from other contractors with more consulting opportunities. Ron’s dreams of opening his own engineering firm seemed well on their way to reality.

Then disaster struck. A small fire started in an unoccupied hotel room. Because the blaze wasn’t detected in time, it soon grew into an inferno … eventually burning down the entire hotel.

Investigators pointed to a lack of adequate fire stops. The hotel owners demanded compensation for their loss. The project manager blamed Ron. Ron believed his design was adequate. But that didn’t make much difference when he was served papers on a lawsuit filed by the hotel owners.

Suddenly, Ron’s bright future was clouded by the reality of expensive legal bills — just to defend his good name.

“Ron” is a real IEEE member (his name was changed to protect his privacy). The lawsuit filed against him was real. And his experience as a consultant points to a need that’s real — particularly for engineers who take on projects on a consultant basis.

You Can Do Your Job Perfectly — and Still Land In a Lawsuit

Even if you do everything right, you can still be sued if something goes wrong on a project. And as a consultant or “moonlighting” engineer, your risk may be even greater.

That’s because many engineers working on a consultant basis fail to carry personal professional liability coverage. Unfortunately, that single oversight can turn “extra spending money” projects into one-way tickets to financial devastation.

Why don’t engineers protect themselves with a personal professional liability program? All too often they mistakenly believe they’re already covered elsewhere. Others simply think they don’t need any additional coverage.

MYTH #1: I’m covered through my employer.

This common misconception can be costly. While you’re probably protected against professional liability claims related to projects you work on at your full-time job, an employer’s liability coverage cannot extend to projects you take on as a consultant.

What if your employer knows about, and gives you permission, to moonlight? You’re most likely still in the same situation. As a general rule of thumb, if your employer doesn’t sign your checks for your consulting project, your employer’s liability protection won’t cover you if anything happens on that project.

MYTH #2: I only do a little consulting work on the side. There’s no reason for me to pay for my own professional liability coverage.

It doesn’t matter how often you consult or how much money you make while moonlighting. As the saying goes … “it only takes one.” One minor oversight (or even the mistaken perception of an oversight) can result in you being named in a lawsuit. And as a moonlighting consultant, you will be responsible for paying your legal bills. You will also be responsible for paying any settlements that may be awarded. Where would you turn for the extra money? Would you need to spend your hard-earned retirement nest egg? Would you be forced to sell your home to come up with additional funds?

Don’t Walk a Tightrope Without a Safety Net

Moonlighting and consulting projects can often be a “tightrope act.” If you’re employed by a firm, you’re balancing your obligations to an employer against your obligations to a client you’re working with “after hours.” If you’re self-employed as a consultant, you’re putting your good name and reputation on the line with every project you accept.

Even if you’re confident you can successfully navigate the project, there’s no reason to attempt it without the safety net of a personal professional liability plan. Protecting yourself just makes good business sense — for your employer, your client and your personal finances.

IEEE Offers Personal Professional Liability Coverage

The IEEE offers a personal professional liability program designed to meet the unique needs of engineers who work on projects on a consultant or moonlighting basis. For more information on this coverage option, call toll free 1-800-375-0775. The IEEE Financial Advantage Program offers members a variety of non-technical products and services, including professional liability Please visit our web site at www.ieee.org/fap for more details or call 800-438-4333.

Denise K. Gibson, RPLU, is a professional liability expert at Marsh Affinity Group Services, a service of Seabury & Smith. Comments may be submitted to todaysengineer@ieee.org.