Been doing this for 15 years and thankfully never had a claim, but I'm curious what actually causes most E&O claims in our business. Is it calculation errors, missed deadlines, or something else? Trying to tighten up my procedures and wondering where the real risks are.
Claim experience - what actually triggers E&O claims?
From what I've seen, rate schedule misunderstanding is the big one. Client thinks they should be on a different tariff, you confirm they're on the right one, then it turns out there was a better option you missed. Had that near-miss with Ameren Missouri - caught it just in time.
Demand billing errors are huge liability. Missed a power factor penalty on a manufacturing plant's AEP Texas account that cost them $25K over six months. Client was not happy. Good thing my E&O covered the settlement because my calculations were off by just one decimal place.
Data security breaches are becoming more common too. Had a colleague whose laptop got stolen with client utility data on it. Even though it was encrypted, the utility required notification of all affected customers. Legal costs hit $30K before it was resolved.
Statute of limitations issues can bite you. Did an audit in 2015 that I thought was clean, then in 2018 the client found an error I missed and sued. National Grid had changed their tariff structure twice in between, making it really hard to defend. Thank god for tail coverage.
Contract disputes are another big one. Client expects you to guarantee savings, you find some but not as much as they hoped. They claim you misrepresented what you could deliver. Always important to be conservative in your estimates and document everything.
Solar and net metering calculations are the new frontier for claims. Worked on a Wisconsin hospital account where the previous auditor completely botched the interconnection credits. Client lost $40K in potential savings. These new energy programs are tricky.
Don't forget about regulatory compliance issues. California has so many energy efficiency programs and rebates that it's easy to miss something. Had a case where an auditor failed to identify applicable CPUC incentives and the client sued for the lost opportunity.
Timing issues too - missing filing deadlines for refund requests. Duke Energy in Ohio has pretty strict deadlines for billing dispute resolutions. Miss the window and your client is out of luck. That's a quick way to get sued even if your analysis was perfect.
Communication failures cause a lot of problems. Client thinks you're handling the dispute filing with Idaho Power, you think they're doing it. Deadline passes, nobody filed, client loses $15K refund. Always confirm in writing who's doing what.
Great thread Maria. The common theme seems to be documentation and clear communication. I always send a detailed scope letter and get client sign-off. Also keep detailed work papers for every calculation. Has saved me twice when clients questioned my work years later.