In mid-November, F. David Shipley passed away. He was 81 years old.

Dave ran a successful insurance brokerage–Shipley and Associates–for many years. Along the way, he and three colleagues co-founded a/e ProNet in 1988. Dave went on to serve as our Treasurer for more than two decades. Recently, he was deservedly named a Member Emeritus.

You can read about Dave’s long, productive, and fun-loving life in The Oregonian. He was a man who lived to serve his community, a priceless quality, and something the world could always use more of.

We are grateful for the time, effort and care he gave to our organization, and we’ll miss him very much. Our thoughts and prayers are with Dave’s lovely family.

At a panel for the NC Bar Association Construction Law Winter Meeting, attorney Melissa Brumback and her colleagues discussed insurance issues for design professionals. One hot topic was the way architects and engineers can inadvertently invalidate their insurance by agreeing to overly broad contractual language. Frequently, this has to do with the standard of care. Melissa penned the following post for the NC Construction Law Blog, and we have reposted it here with her permission:

As most of you know, Errors & Omissions insurance (“E&O” coverage)  is meant to provide coverage for mistakes you may make in performing your professional architecture or engineering services. E&O coverage is important to protect you in the event of a lawsuit because, as you know, no set of plans is perfect (nor is perfection the standard of care).

Be careful, though. Do not promise to provide a higher standard of care than the “professional standard.”

If you are asked to sign a contract that states you will use your “professional best,” “best efforts”, “highest care” or similar, you are being asked to sign something that could cost you your E&O coverage.

Examples of such language:

[Architect] [Engineer] shall perform the Services in accordance with the highest standards of professional competence in the industry.

[Architect] [Engineer] shall exercise a high degree of care and diligence in providing the professional services.

[Architect’s] [Engineer’s] services shall be of first class quality and free from defects.

E&O policies cover you for failing to meet professional standards, but not in cases where you agree by contract to provide a higher/better/best standard. 

Explain the risks in such language to your owner clients.  No owner will want to put your insurance policy in jeopardy, and they should be willing to strike or modify that language to ensure that your work on the construction project is fully protected and covered by your E&O policy.

Some examples of coverable standards:

All services to be performed shall be performed in a manner consistent with that level of care and skill ordinarily exercised by members of Designer’s profession.

All services shall be performed in a manner consistent with that level of care and skill ordinarily exercised by members of Designer’s profession currently practicing in the location of the project for which the services are rendered, or similar locations.

Remember this, and make sure your future construction contracts contain favorable language that will actually be insurable.  You know–the whole reason you have professional liability insurance in the first place!

About the Author

Melissa Dewey Brumback, who blogs at www.constructionlawNC.com, is an attorney at Ragsdale Liggett in Raleigh, North Carolina, where she represents architects and engineers in risk avoidance, contract negotiation, and construction litigation.

Architecture and engineering firms are still learning how to cope with a growing cybersecurity threat. According to this year’s Global Application and Network Security Report from Radware, nearly half of all companies experienced a cyber ransomware attack in 2016. Vulnerability to loss of personal data, exposure of sensitive or proprietary information, etc., is also on the rise. Tim Corbett of SmartRisk LLC, a longtime affiliate of a/e ProNet, has recently analyzed the report findings. He writes that the gravest irony is that while “Employees are the first line of defense” against cyberattacks, they are also a company’s “greatest cyber security weakness.”

Employees’ personal habits regarding company data and digital interactions open doors for hackers, viruses, and the siphoning of information. If your employees aren’t aware of basic threats and/or best practices regarding cybersecurity, your firm is more likely to lose out. The costs of these attacks can be severe. They are also avoidable. SmartRisk’s post recommends regular and up-to-date cybersecurity trainings for your firm “[t]o obtain a broad understanding, and buy-in from the entire organization.”

Arm yourself with SmartRisk’s Checklist

According to SmartRisk, cybersecurity training should take place annually. Corbett offers a checklist for these trainings. Remember to include “all members of the organization, including senior management… so they are knowledgeable of recent trends, monitoring methods, and controls used to prevent the installation of malicious code on the organization’s computer systems.” He also recommends making cybersecurity training a standard protocol for new hires. It’s probably a good idea, as well, to encourage your IT department to be accessible for even basic questions on cybersecurity. Demystifying the response to the threat will empower your employees to be proactive in protecting the company’s interests.

October is Cybersecurity Awareness Month, so you can find a/e ProNet’s past posts on related issues here:

Federal Trade Commission Releases How-To Cybersecurity Guide (Oct 2016)

Cyber Security Awareness & Last Week’s DDOS Hack (Oct 2015)

As always, if you have further questions, please contact your a/e ProNet broker.

Ray and Maria Stata Center (MIT) designed by Pritzker Prize-winning architect Frank Gehry

Every day, technology opens new doors to current and future generations. Nowhere is this more apparent than in education. Video streaming capability allows anyone to “attend” classes at renowned universities, for example.

Harvard Graduation School of Design

One of the most recent examples is an introductory level architecture course from The Harvard Graduate School of Design. “The Architectural Imagination” begins on 23 February 2017, and will be available on edX, the Harvard/MIT-developed platform for “massive open online courses” or MOOCs. It will be taught by Eliot Noyes Professor of Architectural Theory K. Michael Hays, Professor of Architectural History Erika Naginski, and G. Ware Travelstead Professor of the History of Architecture and Technology Antoine Picon.

“Architecture engages a culture’s deepest social values and expresses them in material, aesthetic form,” reads the course description. “In this course, you will learn how to ‘read’ architecture as a cultural expression as well as a technical achievement. Vivid analyses of exemplary buildings from a wide range of historical contexts, coupled with hands-on exercises in drawing and modeling, bring you close to the work of an actual architect or historian.”

Harvard is offering this course for free, though there is a $99 fee required in order to receive a certificate of completion. As indicated by Archdaily, “The Architectural Imagination” is one of several architecture-related courses available on edX. Browse the catalog, and you’ll find others from “institutions including MIT, ETH Zurich, and the University of Tokyo.”

MasterClass

Another fun option for continued learning comes from MasterClass. This private education platform offers a series of video courses with some of the biggest names in arts and entertainment. The stated goal of MasterClass is to “give anyone the ability to gain the wisdom and knowledge of the world’s best creators.” Their current roster includes luminaries like Aaron Sorkin (screenwriting), Annie Liebovitz (photography), Dustin Hoffman (acting), Serena Williams (tennis), James Patterson (writing), and Gordon Ramsay (cooking). As of this spring, the great Frank Gehry (architecture) will add his name and skills to the list.

“At 19 years old, Frank Gehry was a truck driver taking sculpture classes at night school,” reads the course introduction. “His vision for what architecture could accomplish went on to reshape our cities’ skylines, and the imaginations of artists and designers around the world. Now this master builder invites you into his never-before-seen model archive for a look into his creative process.”

The MasterClass platform puts students in close touch with their instructors via engaging online classes, interactive assignments, course materials, student community and Q&A. All classes are available online for $90 each.

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Leddy Maytum Stacy Architects, an a/e ProNet client hailing from San Francisco, California, has received the coveted AIA Architecture Firm Award for 2017.

“Firm principals William Leddy, FAIA, Marsha Maytum, FAIA, and Richard Stacy, FAIA, began collaborating in 1983 and the belief that architecture is the synthesis of poetics, economics, technologies, and meaning has always been embedded in the firm’s culture. Dedicated to addressing issues of resource depletion, climate change, historic preservation, and social equity, LMSA and its leadership clearly demonstrate that architects can help their communities adapt to a complex and rapidly changing world. To that end, the firm’s proficiency in diverse building types – from affordable housing to the adaptive reuse of historic structures – has been recognized with more than 140 design awards and are only one of three firms to have ever received eight AIA COTE Top Ten awards.”

Founded in 2001 by principals Marsha Maytum, Bill Leddy and Richard Stacy, LMSA is well known in the region for its long list of modern, sustainable projects. This includes the Ed Roberts Campus in Berkeley and North Beach branch library, as well as multiple low-income apartment buildings in the Bay Area. LMSA’s Plaza Apartments and Rene Cazeneve Apartments house “formerly homeless residents who need on-site support services to try to rebuild their lives.”

As noted by SFGate.com, “In announcing the selection, the AIA praised Leddy Maytum Stacy for its ‘highly influential work that advances issues of social consciousness and environmental responsibility.’ Only two other San Francisco-based firms have received the national firm award in the past 45 years: EHDD in 1986 and Gensler in 2000.”

LMSA has consistently ranked among the Top 50 firms each year since 2011. It considers itself “a teaching practice committed to developing complete, well-rounded architects, leaders in the profession and effective global citizens.” Read more in Architect Magazine.

Congratulations to Leddy Maytum Stacy Architects on this honor from the AIA! Your commitment to social consciousness and environmental responsibility is an inspiration.

Shout-out Credit

Leslie Pancoast, CIC, RPLU
Vice President IOA Insurance Services – Pleasanton, CA
Email: Leslie.Pancoast@ioausa.com / Phone: 925-416-7862

Navigating your continuously connected life

If you used the internet last Friday, chances are you experienced a few problems. Twitter, PayPal, Spotify, Netflix and AirBnB were just a few of the major websites struggling throughout the day. News sites across the country, including The New York Times and The Wall Street Journal, had trouble, too. This was the result of a distributed denial of service (DDOS) attack, a brand of malicious hacking that the cyber security industry knows well.

A typical DDOS attack involves a hacker or hackers using malicious software to infect thousands of computers. They then control those infected machines to coordinate an attack, overwhelming a website with too much traffic until it crashes. Friday’s DDOS attack was more complex and more powerful.

First, the hackers didn’t use a mere “bot-net” of infected computers. They used millions of infected webcams, closed-circuit TV cameras, DVRs, routers… the so-called Internet of Things.

As NPR technology reporter Alina Selyukh explains:

“We’ve all been buying these new things, connecting them to Wi-Fi. Internet wonks will call this the internet of things. Experts have been warning that these things are never secure. This is the most visible example so far of what happens when hackers hijack a tremendous number of them.”

The other thing that set this attack apart was the target. Certainly, the major companies affected by the rolling attack throughout the day were targets, but it does not appear that any one of their websites was hit individually. Instead, the hackers targeted a company called Dyn.

“[I]t is the kind of company that sits between you and a website that you’re trying to access. When you type in a web address, it makes sure that you land exactly where you intended,” Selyukh told NPR. “And Dyn’s clients are some of the most popular websites and services out there.”

Friday’s events prove that technological innovation often advances faster than technology security. We’re all vulnerable when that happens.

National Cyber Security Awareness Month

October is National Cyber Security Awareness Month (NCSAM), an initiative created to bring awareness to issues like this one, and to encourage collaboration between government and industry to serve the American public. As part of the annual campaign, Stay Safe Online offers a collection of resources to educate and assist you in shoring up your own cybersecurity. These are useful both personally and professionally, so we hope you’ll check them out.

And for those interested in insuring against potential losses due to cyber risks, many top tier professional liability insurance carriers also offer cyber liability insurance for design professionals. Here are just a few:

PUA Cyber Liability Insurance

RLI Cyber Liability Insurance

Travelers Cyber Liability Insurance

Victor O. Schinnerer Cyber Liability Insurance

Keep those passwords strong!

 

Are Hackers a Threat to My Design Firm?

Hackers make headlines daily with targets ranging from major Swiss banks to Minecraft users to German nuclear power plants. But what are the risks to architects and engineers?

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Professional Liability carrier Victor O. Schinnerer urges design professionals to Take Cyber Liability Exposures Seriously in a recent blog post:

Cyber liability problems that have disrupted firm operations often are based on one of three vectors:

— insiders who are dissatisfied or recognize their ability to tap firm assets and use that access for harm or personal profit;

— past employees who either take digital assets with them or to enact revenge against their former employers corrupt firm systems and information; and

— hackers who know that confidential project data is vulnerable and hold digital information hostage until a ransom is paid.

Hackers Can Wreak Havoc on a Firm

Although internal threats cause many cyber liability breaches, a malicious outsider is one of the greatest fears of professional services firms. A hacker could cause data inaccessibility through alteration or destruction. A firm would lose intellectual property and no longer be able to meet contract objectives and deadlines. Attackers who gain access to a firm’s data can encrypt it using ransom-ware and extort payment to regain access to information. Firms that do not properly preserve digital assets through robust back-up systems often have no alternative but to pay the ransom.

Construction projects today are increasingly dependent on digital technology. The adoption of BIM and the increasing use of digital technologies in designing, constructing, and operating buildings and infrastructure are transforming the way the industry works. The concept of collaborative work through the sharing and use of detailed models and large amounts of digital information requires that parties be aware of vulnerability issues and take appropriate control measures. Improper access controls could lead to an attack severely disrupting progress on a project, causing delays or remedial work that could lead to significant claims from owners, lenders, or other stakeholders. And if confidential information on the structure or systems of projects is accessed by unauthorized parties, the safety of the owners and users of the buildings or infrastructure could be put at risk.

It is possible to insure against these vulnerabilities. Schinnerer’s Cyber Protection Package is one example of such coverage. Here are a few others:

Give your local a/e ProNet broker a call to discuss your options today.

smoothsailing_engineeringinc

Design firms preparing to purchase or renew professional liability insurance ask the same few questions every year.

How will my professional liability premium be calculated? Will my professional liability premium go up? Should I change professional liability insurance companies?

One helpful resource to answer these questions is the 2015 Professional Liability Insurance Survey of Carriers, a report published annually by the ACEC along with a companion analysis in Engineering, Inc. that includes insight from insurance companies and other experts  This year, the title of the article says it all: 2015 was “Smooth Sailing” for the professional liability insurance industry, and that means good things for architects and engineers.

“The ACEC Risk Management Committee worked with the American Institute of Architects, the AIA Trust, and the National Society of Professional Engineers to survey 18 carriers.” With construction spending higher than it’s been in years and expected to rise, the number of insurance companies providing professional liability insurance to architects and engineers is also growing. New markets increase the competition for more established companies, and keep rates stable, which means Eric Moore, President of a/e ProNet and Vice President of Moore Insurance Services, is optimistic.

“Nonrenewal is about the only reason Moore would suggest changing carriers” this year. “If you do see a claim, a carrier you’ve been with a few years is less likely to drop you, he says.”

Also quoted in the article are representatives from several of the top-tier professional liability insurance carriers, like a/e ProNet sponsors Travelers, Beazley, and Victor O. Schinnerer, as well as Tim Corbett of SmartRisk, a performance management consultant for the design and construction industry, who has written for a/e ProNet many times.

You can read a digital version of this article in the January/February 2016 issue of Engineering, Inc.

As always, if you have any questions about this report or the professional liability market, please contact your local a/e ProNet broker today.

poetry_foundation_building

Chicago architecture firm and a/e ProNet client John Ronan Architects is one of seven finalists for the design of the Obama Presidential Library, which will be built on Chicago’s South Side. The remaining seven firms hail from all over the world, so it’s exciting that at least one “local” architect made the cut. John Ronan Architects may be best known for the dramatic Poetry Foundation building in Chicago. Best of luck to the team!

Shout-out Credit:

Mike Welbel
M.G. Welbel and Associates
650 Dundee Road, Suite 170
Northbrook, IL 60062
Phone: 847.412.1414
mwelbel@mgwelbel.com