There are few things more beautiful than a city decked out for the Christmas holidays, and for that we thank the architects, engineers, urban planners, and designers. We wish all of our readers, friends, and followers a safe, peaceful holiday. All the best in 2014!
We read the ArchDaily blog all year round, but last week’s fun, holiday post is worth mentioning here. (If only because they saved us the trouble of coming up with 13 excellent gift ideas for architects! Thanks, guys!)
From design apps to wall clocks to art prints, these ideas are all unique, all vibrant, and all good. If you’re wondering what to get for your favorite architect this year, check out ArchDaily’s Architect’s Holiday Gift Guide 2013.
And when the wrapping paper has been discarded and the tree hauled out to the curb for the Boy Scouts to collect, when 2014 dawns, make sure you visit ArchDaily again. They’re a fantastic source of relevant, inspiring industry news.
No engineering project is without risk. Somewhere between the goal of designing the best bridge, building or water treatment facility and running a profitable business lurks the ever-present possibility of litigation. A legitimate disagreement can occur, a company can make a mistake, or a firm or government entity—or a member of the public—can file a lawsuit that forces the firm to defend itself and its work. “A lot of risks exist and they’re not necessarily related to the quality of the work performed,” says John Moossazadeh, a senior vice president at Kleinfelder in San Diego.
Engineering firms often take jobs that knowingly expose the firm to legal risk. But how much risk is too much?
That’s a question that more and more engineering and design firms are asking when confronted with contracts that contain controversial “Duty to Defend” language.
A contractual Duty to Defend provides that the engineering firm will pay for attorney’s fees and costs incurred in a client’s defense of a claim. Depending on the con-tract language and the governing jurisdiction, this duty may be immediate from the time the claim is made, and may exist regardless of whether the engineer is found to be negligent. Although basic indemnification and defense clauses are common, and they typically assign risk to the negligent party, a growing number of developers and agencies request—and, in some cases, demand—that the consultant or firm in charge of the project defend any suit or other legal action brought against the developer or owner, and sometimes even irrespective of whether the claim is related to the engineer’s services.
Duty to Defend provisions are therefore criticized because a consultant or engineer who signs such an agreement could be legally required to bear the cost of defending against any project-related claim, even when the claim has nothing to do with the services performed by the firm, and there’s zero evidence of negligence. “It forces engineers to take responsibility for far more than the work they’re being paid to do and what their insurance covers,” explains P. Douglas Folk, principal at Folk & Associates in Phoenix. Continue reading “An Unfair Duty to Defend”
Why should I strike “breach of contract” from the indemnity provision in my agreement?
For one thing, it is redundant as there is already a remedy under the law should you breach your contract. Please note the excerpt in the next question from our Practice Notes Vol. 4 NO. 2, Indemnification: How to Identify Unacceptable Risks and Get Them Out of Your Agreements.
Negligence may be difficult to prove, but breach of contract is not. To establish a breach, all an owner need do is prove that 1) you owed a duty to perform under your agreement, 2)you breached that duty, and 3) damages were sustained as a result. This is your client’s fall back position in the event negligence turns out to be impossible to establish. It is also your invitation to the owner to sue you at your expense. There is great leverage in this, and it flows in a single direction-from you to your client. Your client sues you for breach of contract, and you pay the associated attorneys’ fees and costs. Arguably, this is inconsistent with public policy. Public policy generally demands mutuality as a matter of equity where there is an agreement by one party to pay the attorney’s fees of another regardless of the outcome of a dispute between the two. Attorney’s fees are the only issue here, for if you are found to have breached your contract, there is a remedy for that in the law. As far as you are concerned, it is neither necessary, nor is it appropriate for you to add your indemnity to that remedy. Absent negligence your indemnification for breach of contact may be uninsurable; absent mutuality, it is unfair. Delete this language if you can. If you encounter sustained resistance, you might invoke the public policy argument and propose, as an alternative, to substitute language elsewhere in your agreement calling for the non-prevailing party to any dispute to compensate the prevailing party for costs of defense. There is leverage in this for you, but there is also some risk. Seek the advice of counsel before you pursue this strategy.
Excerpted from the FAQ page on the a/e ProNet website, one of many risk management resources for Architects & Engineers. Have any questions? Contact your local a/e ProNet broker or contact us directly today.
Architects and engineers already share their voices with the world through their designs and ideas, but we love it when this group gets proactive about amplifying their voices online, too. Today we want to highlight the blog of one a/e ProNet member’s client: TLCD Architecture in California.
TLCD Today is a fun, colorful blog that deals with issues relevant to the design industry in ways both focused and abstract. The blog’s multiple authors take time to interact with design colleagues at national conferences (Healthcare Design Conference Highlights), as well as with the firm’s local business community (Local Impact of the Affordable Care Act). It’s also inspiring to see architects use their specific skill set to give back to people in need (Habitat for Humanity Build Day). Well done, TLCD! Keep up the good work. We’ll be reading!
Does your architecture or engineering firm have a blog? Share it with us in the comments below. We’d love to follow you!
Shout-out Credit:
Leslie Pancoast, CIC, RPLU
Managing Partner
IOA Insurance Services – Pleasanton, CA
Email: Leslie.Pancoast@ioausa.com / Phone: 925-416-7862
Much has been made in recent years about the low percentage of women in the engineering industry, but comparatively little progress has been made. The question remains: How do we encourage a young girl’s interest in designing, problem-solving, experimenting, developing, and building? Because if we can do that with the current generation of imaginative, technologically-inclined youngsters, there could well be a marked increase in the number of women who choose careers from among the broad range of engineering disciplines.
This new advertisement from GoldieBlox, which has “developed a set of interactive books and games to ‘disrupt the pink aisle and inspire the future generation of female engineers’”, is a fantastic start!
[youtube=http://www.youtube.com/watch?v=UFpe3Up9T_g&w=640&h=360]
Set to the tune of the Beastie Boys’ famously catchy Girls, we see the execution of a fabulous Rube Goldberg machine as a trio of excited would-be engineers uses their perpetually pink toys to play a new version of house.
There may be many answers to the question of gender disparity in the engineering industry, but this is definitely one of the more fun, optimistic ones. Well done, GoldieBlox! And just in time for Christmas.
a/e ProNet is excited to announce the expansion of the a/e ProNet David W Lakamp/AIA Scholarship. For more than two decades, our organizations have partnered to award two scholarships each year to rising senior or graduate architectural students. At the annual a/e ProNet meeting in Chicago this September, our Board of Directors authorized the increase of the scholarship amount from $2,500 to $5,000 apiece. These changes will take effect with the 2013 scholarship. The deadline for this year’s scholarship application is November 29.
Visit our website for more details about this scholarship for architecture students. Applications and submission details can be found at the AIA website. Applications and supplementary materials can be submitted via email to pmkc@aia.org in PDF format.
In 2012, two recipients were awarded the a/e ProNet David W. Lakamp Scholarship. To read their case study topic responses, please click here.
Questions? Please send inquiries to: pmkc@aia.org
This issue of ProNetwork News is meant to serve as a basic reference guide to the property insurance coverages typically purchased by design firms. Last month we posted a companion piece, Insurance 101: The Things You Always Wanted to Know About Liability Coverage But Were Afraid to Ask.
We continue our overview of insurance products of interest to design professionals with this review of property coverages that may apply to the needs of your particular practice. As always, we encourage you to ask your broker what insurance is right for you.
BUSINESS PROPERTY INSURANCE
Whether you lease or own your office, you need to insure office equipment, furniture, fixtures, computer equipment, phone systems, fax/copiers, valuable papers and fine arts for fire, theft and water damage. Insuring these valuables for “replacement cost” on an “all-risk form” means that your business is most likely to be reimbursed properly for a covered loss. If you lease furniture and equipment, the lessor will require this coverage and will be designated as a “loss payee.” Landlords of rented property usually require their tenants to maintain property coverage for the rented space to cover improvements and betterments provided to the leaseholder.
Since most design firms are heavily dependent on computer systems, it is important to properly inventory equipment and software.. For example, the cost to reproduce plans and specifications kept on computer files is significant when considering the insured value of valuable papers and records. However, no limit of insurance is a substitute for reliable backup procedures.
Stand-alone IT coverage packages, including security breach, are evolving almost daily. They can cover both first party losses (yours) and third-party losses (those for which you may be liable to others). Ask your broker what products may best apply to your needs.
VALUABLE PAPERS INSURANCE
A/E firms have in their possession valuable papers and documents whose destruction would prove very costly. Maps, plans, specifications and books are some examples. All-risk protection is generally available excluding wear and tear, gradual deterioration and vermin. Certain valuable papers may be insured specifically, or “scheduled.” More commonly, a blanket limit is established to cover all valuable papers. Articles insured on a blanket basis are covered for their replacement cost. Scheduled items are covered on a valued basis even though it is not possible to replace them with like kind and quality. Continue reading “Insurance 102: Property Coverages for Architects & Engineers”
In an effort to demystify some of the concepts and to provide a ready reference, a/e ProNet gathered some of its finest insurance minds and put together this list of typical coverages for design professionals. This is not intended to be an exhaustive source of information but rather a primer designed to answer basic questions and to put the reader on the right track if more information is needed. Today, we’ll touch on Earthquake insurance and Flood insurance for Architects and Engineers:
Earthquake hazards in the United States are commonly associated with Western States and in particular California, however in past history, significant earthquakes have occurred on other states including South Carolina, Missouri, Ohio and Alaska. Because in the mid-states of the US a significant earthquake hasn’t occurred for more than 100 years, people have become very complacent about a reoccurrence. Some experts say it’s not a matter of “if” but “when.” As a result of this casual attitude, a high percentage of real and personal property is not currently insured for this hazard. A further concern is that building structures in these mid-state areas are not constructed to resist earthquake damage such as most new construction in California and other western states are. Keep in mind that loss is not limited to the direct damage to property. Severe earthquake may interrupt public transportation, damage roads and bridges that prevent the movement of private vehicles. Many utilities including electricity, water, fuel gas, and sewage may be interrupted for long periods of time. Every firm would be well served to investigate Earthquake Coverage for their building and contents coverage, even though the risk of loss seems remote.
Most Earthquake coverage is written on a “Difference in Conditions” insurance form, attached to standard property policies. This form originally included a multitude of “All Risk” coverages offered with earthquake added as an insured peril. The evolution of this coverage form has changed the focus to coverage from “All Risks of Loss” to focus on earthquake, Sprinkler Leakage, and Flood and does not include landslide, subsidence or soil movement unless it is caused by Earthquake. Continue reading “Natural Disasters: Earthquake and Flood Protection for Architects & Engineers”