The Case for Carrying E & O Insurance „ Greg Crites, PLS Editor’s note: When this article ran in our July/August issue, a few paragraphs were omitted. We are republishing the article in its entirety. We apologize for the error. The Oregon Surveyor | Vol. 38, No. 5 12 ERRORS AND OMISSIONS INSURANCE Going without Errors and Omissions insurance (commonly known as professional liability) is much like playing Russian roulette. The consequences of having to ante up a ton of money to remedy a mistake may not result in your own demise, but almost certainly may end in the demise of your sole proprietorship. You know, that business you labored so hard to build for so many years, sacrificing time with your children, grandchildren, your significant other and probably many social connections that required your physical presence to nurture. I have to insert some disclaimers before I paint this picture. First, I have no affiliation with any insurance carrier so don’t expect any information regarding the costs of this type of coverage or who the providers might be. Second, the decision to carry E & O insurance is yours and yours alone, made from an informed position shared with the carrier of your choice. Finally, the case I’m about to make is mostly fictitious, but does represent a collection of my perspectives based on more than 40 years of land surveying experience. The call It’s about 3:00 pm on a Friday afternoon. The phone rings and of course you’re looking for more work to pay for that orthodontia your nearly teenage daughter simply must have. You pick up the receiver (sorry, now it’s more likely your cell phone but I did mention how long I’ve been in practice) and offer your usual business greeting, shortly discovering that this distraught female caller has waited about three months beyond the limits of her patience before making the call. She has endured months of harass ment at the hands of her neighbor over a disagreement regarding the location of their common boundary. What you don’t know at this early phase of negotiations is that this woman is a transplanted Californian and her hostile neighbor, who looks upon Californians as aliens, bought his property nearly 40 years ago. The property she purchased last year is in a rural, unincorporated area of the county; she has lots of money and is willing to pay someone well if the results of their work meet her high (though perhaps unreasonable) expectations. This woman is used to getting her way after many years as a successful actress in Hollywood and therefore possesses a sense of entitlement that you are unprepared for. She has decided to raise a very exotic type of farm animal, an animal whose fur is highly regarded by boutique clothing manufacturers (who of course will pay a premium for this fur) and is so well connected and such a natural salesperson that her farm output is contractually backlogged for more than five years. Almost immediately after closing on the sale of the property, she needed to build some extremely sturdy fences to contain her animals (fences that wouldn’t really blend with the forest environment within which they’d be built), so she hired a local surveyor to set stakes along her boundaries in advance of the fencing contractor whom she’d retained for their construction. The hostile neighbor waited until the fencebuilding project was completed and land clearing was well under way before voicing his disagreement over the location of the fences. Due to the wishes of his client, the local surveyor that did the layout for the fences never talked with this seemingly unfriendly neighbor. The research After getting the distraught woman to calm down, you find out that she obtained your name from her attorney (do you hear any warning bells yet?) and that you were highly recommended for the work. Of course, she wants to know how much she’ll have to pay for your services, but you’ve made it a standard practice to do your research before preparing an “informed” estimate. Giving her assurances that you will call her back, you make it clear that you must do some research first. To expedite your research, you ask her if she has a copy of the deed (she does), whether she has a copy of her title report (assuming she paid for one) and if she has done research of her own in the public records to see if any surveys have been performed in the vicinity of her property (she has not). You request that she mail you a copy of the deed and the title report. Almost as an afterthought, you ask her to include a copy of the recorded survey prepared for the fencing contractor. A brief silence ensues, after which she remarks that the fencing surveyor did not record a survey as no permanent monuments were set (obviously his words, he merely set wooden form stakes for the fencing contractor to follow). She could, however, provide a copy of his work map. You tell her that once you receive the information you’ve requested and have had time to conduct a little research within the public record, you will call her back with your decision whether to take on the job and, if so, how much it will cost. Of course, she wants to know how long that will take. A copy of the deed shows up in the following week and things appear simple (do you hear another warning bell?). The property is a metes and bounds description of a tenacre tract (the section, township and range don’t matter at this point) with one exception: the point of beginning (POB) is defined as the NE 1/16 section corner! Interestingly, the bearings of the out bounds of the 10acre tract are recorded to the nearest second and the distances along each course are shown to the nearest onehundredth of a foot (there are those warning bells again)! The local surveyor performed a legitimate subdivision of the section to arrive at the location of the POB and computed the location of the fence lines to be built based on aliquot parts (as
PLSO Issue 5 2015 September October
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