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ProNet Clients Among 2017 AIA Indiana Award Winners

By Lynda

Markle Branch Library of Huntington – City Township Public Library – krM Architecture+

Once again, we’re proud to see several of our clients on the list of winners at the AIA Indiana Excellence in Architecture Awards.

AXIS Architecture + Interiors

Honor Award – New Building – (Project cost greater than $5 million)

Project Name: Cummins LiveWell Center

Jury Comments:

The jury felt this project achieved a rich and simple elegance in both plan organization and exterior lines. We commend the connectivity between the indoor and outdoor environments, the palliative interiors, and use of calming tones and textures. The architectural team’s design response achieved the goal of challenging the stereotypical doctor’s office and exemplifies a holistic integration of architecture, building systems, function and site design.

Honor Award – Renovation / Addition

Project Name: Jarden Home Brands

Jury Comments:

This project creates a work environment successfully designed to foster collaboration and innovation. The design translates well from the initial concept sketches to the three-dimensional outcome with areas defined by varied use of color, texture, and architectural elements. Open collaborative workspace is balanced with quiet space for focused work. A courtyard and skylights enhance the experience for a seemingly large floor plate, bringing daylight to interior spaces. The client’s products are artfully integrated into the design in light fixtures and an art installation that serves a hallmark of the design.

Merit Award – Interior / Retrofit

Project Name: Business Furniture Corporation Office + Warehouse

Jury Comments:

The jury was particularly impressed with the design team’s expression of scale through forms, layers and textures. Marked attention was given to the importance of ceiling planes to define a space. The project clearly articulates a dynamic and collaborative work environment but also showcases the client’s passion for its product through its integration with the design.

Design Excellence

Project Name: Cummins LiveWell Center

Jury Comments:

The Cummins LiveWell Center garnered the jury’s unanimous support for the Design Excellence award. The beautifully proportioned, elegant building goes beyond ordinary expectations. The building’s transparency offers abundant, but managed views, to the mission within. The low-scale, “E” shaped building introduces daylight and affords occupants with views to the outdoors at every turn. Views to gardens in the courtyards and the landscape beyond support our biophilic connection to nature and embodies evidence-based, restorative concepts that support healing and wellness. Beautifully executed and well done.

arcDESIGN

Merit Award – Historic Restoration

Project Name: Indiana State University – Normal Hall

Jury Comments:

A respectful revival of a building allowed to badly deteriorated over time, and a commitment from the University to the future by restoring this oldest surviving building on-campus. The Jury admired that the design team studied archival photos to reproduce furniture and replace lost materials. The Jury applauds the restoration of the historic stained-glass dome as a centerpiece to celebrate this building. The addition articulates clearly the differentiation of new vs old building with a design reflective of its time, respectful of historic while clearly of a new century, and doesn’t compete but is compatible with original scale and materials. The outcome reflects patience with the process of restoring an old building where unexpected surprises were revealed through careful removal process. Congratulations – well-done!

Continue reading “ProNet Clients Among 2017 AIA Indiana Award Winners”

Benefit from Selecting the Right Professional Liability Broker

By Lynda

For design professionals, finding the right insurance broker can present a challenge. You need someone with ample experience handling the professional liability needs of architects and engineers, and who offers a wealth of value-added services. Only if your broker has a comprehensive understanding of what you and your firm are all about can he or she be of real use to you. Lacking this knowledge can leave your firm vulnerable in a shifting insurance marketplace. A good specialist broker is committed to investing the necessary time and resources to your account. They find you the best coverage for the best price, and they save you the considerable time it would take for you to do so on your own.

What is professional liability insurance and why is it important?

A professional liability (errors and omissions) insurance policy provides coverage to defend and indemnify a professional firm against claims alleging negligent acts, errors, or omissions in the performance of professional services.

Any project can give rise to a claim. Even if your firm employs an excellent risk management strategy, it is vulnerable to being named in a lawsuit. The cost of that defense can mount fast, even if your firm wasn’t in the wrong. A professional liability policy covers the cost of defense.

In the event that your firm is found negligent, and that the firm’s negligence gave rise to the claim in question, your professional liability policy will cover your firm for the damages you’re

legally obligated to pay, up to the policy limit. (Note: In most cases, defense costs erode the policy limit. Having adequate limits to cover both defense and indemnity is important.)

Why do I need a specialist insurance broker? Shouldn’t I be able to purchase my professional liability policy directly from an insurance company?

For architects and engineers, maintaining an active and adequate professional liability insurance policy is very often a legal requirement. And while a basic professional liability policy is straightforward enough for anyone to acquire, the insurance needs of design professionals are more complex than that.

The insurance industry is full of companies who want your business, but no two professional liability insurance carriers are exactly alike. Among the major differences are:

the size of policy limits offered;
whether multiyear policies are available;
underwriting appetites for types of engineering services;
and claims service.

Some companies require a 10-year loss history from design professionals, while others only require a five-year loss run. A specialist broker knows what the markets are doing, who the underwriters are, and how to present your firm in the best possible light. He or she will have understand each insurance company’s application and is quick to assist you in providing requested information. The cost of your insurance depends on this knowledge and attention to detail used on your behalf.

Here it should be noted that insurance companies often reward longevity. If your firm has been insured by a single company for a number of years and doesn’t have an especially adverse claims history, it’s likely that your premiums have been fair and endorsements (e.g., per project limit increases) have been easy to come by when needed. This does not mean that your current insurance company should be the only one to see your renewal application, however. A specialist broker understands the importance of approaching multiple markets periodically, either to reassure you that your policy is in the right hands or to grant you the opportunity to trade up.

Whether the market in a given year is hard or soft, a skilled professional liability insurance broker’s experience will benefit your firm. You need competent advice from a broker with the right perspective, both on your industry and the needs of your firm, as well as on the insurance marketplace as a whole.

This has been an excerpt of the January 2017 issue of ProNetwork News. Download the full free PDF version of Benefit from Selecting the Right Professional Liability Broker here.

About the Author

Audrey Camp is the Web & Social Media Consultant for a/e ProNet. She spent six years with a/e ProNet member IOA Insurance Services in California as a licensed account manager, specializing in the professional liability needs of architects and engineers. Today, Audrey works as a freelance writer living in Oslo, Norway. Her work has appeared in several literary magazines, journals and anthologies, and she is a founding member of the Oslo Writers’ League (OWL). She has also written for English-language Norwegian news sites and magazines. Most recently, Audrey co-authored two books—Startup Guide Oslo (Oct 2016) and Startup Guide Vienna (March 2017)—for a Danish company called Startup Everywhere, a process that inspired her appreciation for social entrepreneurship and intrapreneurship. Audrey has managed the a/e ProNet website, blog, social media presence and other publications since 2011.

Winners of 2017 a/e ProNet AIA Scholarships Announced

By Lynda

Each year, we partner with the AIA to present two $5,000 awards to architecture students who demonstrate a particular interest in the principles of management in architecture practice. We’re proud to announce that the following students have won the 2017 David W. Lakamp a/e ProNet Scholarship:

Emmanuel Cofie always had an eye for art and design. This desire led him to obtain a B.S. in Architecture from Florida A&M University (FAMU) in 2007. Subsequently, he landed a full-time position at an architecture firm in Florida. The job exposed him to team collaboration, the risks involved with poor communication, and the means by which stakeholders, with different interests, mitigate issues. Wanting a more technical education, Cofie enrolled in FAMU’s Construction Engineering Technology Program and completed the degree in 2016 with knowledge of how to plan out projects to suit the owner and minimize financial loss. While enrolled, he went on a missionary trip to Peru where he saw the effects of inequality and forced urbanization first-hand. It’s apparent that such education will be needed for a future design professional to solve such complex issues. This experience further strengthened his desire to study architecture at the graduate level. Cofie will start a two-year Master of Architecture (M.Arch) degree at the University of Michigan this fall.

Emily Wirt, NCIDQ, LEED GA, completed her Bachelor of Fine Arts with an emphasis in Interior Design from the University of Georgia in 2012. She is currently a first-year Master of Architecture candidate at the Georgia Institute of Technology. She is an active member of Georgia Tech’s American Institute of Architecture Students and Women in Architecture chapters. Prior to her graduate studies, Wirt worked as a commercial interior designer for four years in Atlanta and Shreveport, LA, primarily in the corporate design and healthcare sectors. Her design work at smaller local firms provided opportunities to manage design projects with sustainability and risk assessment at the forefront. She served as the main point of contact during the contract administration phases of several larger projects, and during this role, she learned the importance of clear communication between contractors, clients, and the design team to ensure a successful and cohesive project. To further her professional standing and commitment to sustainable management, she has also obtained her National Council for Interior Design Qualification (NCIDQ) certification and LEED Green Associate accreditation. In her graduate studies, Wirt strives to further her studies of innovative technologies in sustainable design in regards to risk assessment.

“The scholarship applicants this year demonstrated strengths in diversified areas within the submission requirements that made it challenging to select our winners. The scholarship winners however, stood out among the rest because not only did their essays address the practice management topic in an articulate to-the-point manner, but also the suggested solutions demonstrated clear understanding of best practices such as peer reviews and the value of accountability, where risk is reasonably managed and future potential liabilities mitigated and the value of communication that includes in person interactions. In addition to the essay responses, the jury found the letters of recommendation to be strong while the experiences documented in their resumes indicated a conscious initiative to be educated in the business aspect of architecture while at the same time having strong design firm experience.” You can read the full AIA Press Release here.

This year, the essay prompt revolved around overseas collaboration. Excerpts of the winners’ responses can be found here.

Started in 1990, the scholarship was renamed in 1999 for David W. Lakamp. Mr. Lakamp was a founder of a/e ProNet and a trusted advisor to the profession. He left behind a legacy of professionalism and integrity that set new standards in the field of insurance services. The jury for the 2017 David W. Lakamp a/e ProNet Scholarship includes: Thomas G. Coghlan, A. Lira Luis, AIA, Matthew Shoor, AIA, and Muriel Watkins. Read more about our scholarship programs for architects and engineers, including a list of past winners, on the a/e ProNet website.

If You Build It, They Will Sue: Condominium Projects – Part II

By Lynda

Continued from the August 2016 issue of ProNetwork News including an analysis of Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP, et al. and its impact on future court decisions.

IV. Important Contract Provisions

A. Indemnity, Indemnity, Indemnity!!!

In the real estate business the often-touted phrase is “location, location, location.” In the design and construction industry, the most important contract provision is INDEMNITY. Indemnity is an agreement to assume a specific liability in the event of a loss. It may mean a shifting of risk from one party to another. More often than not, it is the client saddling the design professional with an onerous indemnity provision. Many articles have already been written about addressing the client-drafted indemnity. Avoid an express duty to defend (and in California especially, negate this duty). Tie the indemnity obligation to a determination of negligence. However, in the context of agreeing to perform professional services on a condominium project, you must not only be wary of the indemnity provision imposing a contractual obligation on the design professional, but serious consideration should be given to obtaining express indemnity language from the client developer and/or the client developer’s contractor and subcontractors. Since the design professional may be sued directly by an HOA or individual unit owners, express indemnity running in favor of the design professional is equally important.

B. Waiver of Consequential Damages

These damages are the “indirect damages and expenses” claimed by plaintiff(s) allegedly relating to asserted design and construction defects. Often, consequential damages include damages relating to delays, loss of use, lost profits, etc. It is a balancing provision in that it should recognize, much like a limitation of liability (discussed further below), that there are relative risks and rewards for each party’s participation on the project. As was commonplace during the recent recession, some client developers pursued claims against design professionals and contractors for missed market opportunities to sell their individual units before the housing bubble burst. The design professional has no control over such market factors. A properly-worded, mutual waiver of consequential damages is an appropriate way to address this.

C. Limitation of Liability

Given the increased risk of being sued on a condominium project, a limitation of liability (overall cap) of the design professional from the client developer is essential. A limitation of liability provision can be tied to the amount of available insurance, the architect’s total fee, or some other amount as negotiated between the parties to the contract. The limitation of liability provision should be negotiated at arm’s length such that both parties have the opportunity to accept, reject or modify the provision.

This is an excerpt of the October 2016 issue of ProNetwork News. Download the full PDF of If You Build It, They Will Sue: Condominium Projects – Part II to continue reading. Along with further explanation of the relevance of The Beacon Case, the second in this two-part series provides an overview of several more important contract provisions, including: No Third-Party Beneficiaries, The Certification of Merit, and Provisions Requiring the Developer and Subsequent Owners to Include Maintenance Requirements and Manuals in CC&Rs and Purchase Agreements. As always, these newsletters are available to a/e ProNet clients the month they are published. If you’d like to take advantage of this value-added service, get in touch with your local a/e ProNet broker today.

About the Author

Trevor Resurreccion is a partner at Weil & Drage, and an experienced litigator representing architects, engineers, general contractors, subcontractors, and other members of the design and construction industry. Trevor has handled a wide variety of construction related cases, including claims for design errors and omissions, delays, cost overruns, mechanic’s liens, construction defects, as well as catastrophic personal injury and death claims. He received his undergraduate degree in Architecture with a concentration in construction management. Trevor’s background in the design and construction industry includes hands-on experience on construction projects, including construction administration for an international architectural firm on a high-profile project in Los Angeles and construction management for Georgetown University on a significant university project. As an attorney, he prides himself in his commitment to advocacy for his clients, small and large. He has experience in all aspects of litigation, including arbitrations, trials, and appeals. He is licensed to practice law in California and Nevada.

Indemnity Relief Coming to California Design Professionals

By Lynda

On April 27, 2017, Governor Jerry Brown signed Senate Bill 496 (“SB-496”) into law. SB-496 will significantly lessen the burden of indemnity provisions and the dreaded immediate duty to defend in both public and private contracts with design professionals. Efforts to obtain passage began several years ago and were spearheaded by the hard work of the American Council of Civil Engineering Companies, California Chapter (“ACEC-CA”) with the support of American Institute of Architects, California Chapter (“AIA-CA”), as well as member firms. Collins Collins Muir + Stewart LLP was involved with both ACEC-CA and AIA-CA in assisting with pushing the bill through.

Authored by state Senator Anthony Canella (R-Ceres), SB-496 significantly expands Civil Code section 2782.8 protections to add private contracts entered into by design professionals after January 1, 2018. Importantly, SB-496 limits the “duty to defend” to the comparative fault of the professional which puts both private contracts and public contracts on equal footing.

What does this mean in practical terms?

For all private contracts entered into by a design professional prior to January 1, 2018 (meaning those contracts without the protections of SB-496) that contain a provision obligating the design professional to indemnify and/or defend their client, the design professional could be on the hook for all of their client’s attorneys’ fees and costs by virtue of being sued, even if the design professional was ultimately found not to be at fault. For private and public contracts entered into after January 1, 2018, with the protections of SB-496, if the design professional is found to be 25% at fault, then the law provides that they would only be liable for 25% of the fees and costs of a party seeking contractual indemnity and defense reimbursement. If found 0% at fault, they would not be responsible for any of their client’s attorneys’ fees or costs.

Currently, there is no way to insure to cover the costs and exposure created by an immediate “duty to defend” provision because, though professional liability insurance is available to design professionals, it only covers damages that result from a design professional’s negligence. This bill is a fair compromise because it protects against the design professional’s uninsurable first-dollar defense indemnity obligation while allowing a client the ability to recover those costs and fees tied directly to the percentage of fault. Assuming the governor signs the bill which is expected, this is a big step in protecting design professionals from the harsh impact of indemnity provisions in future public and private contracts.

About the Authors

Justin D. Witzmann

Ryan P. Harley

Nothing contained in this article should be considered legal advice. Anyone who reads this article should consult with an attorney before acting on anything contained in this or any other article on legal matters, as facts and circumstances vary from case to case. This post was originally published as a newsletter by Collins Collins Muir + Stewart LLP in April 2017. It has been reposted with permission.

Copyright Rights and Wrongs

By Lynda

Copyright Definition Copyright seems like a rather lofty notion. Few put copyright at the top of their list of must-haves in contract negotiations, and even fewer take the time to actually register their documents for copyright protection. But you do have copyright protections under current law. That copyright can come in handy as a risk management tool as well as leverage in a fee dispute. Unfortunately, many design professionals give away their rights vis-à-vis their contracts without a full appreciation of the implications of their actions.

Copyright statutes have been on our books since the 1700s. The Copyright Act (Title 17 of the US Code) provides useful protection applicable to your practice by including pictorial, graphic and sculptural works, as well as architectural works, as copyrightable materials. Architectural works include drawings, models and the structure itself. “Arrangement of spaces and elements” are protected, but not “individual standard features.” Registering your architectural works creates a public record of the registration and is essential in an infringement action. It takes 30 minutes and $30 to complete. But even if you do not register your works, they are still protected unless you give those rights away by contract.

Copyright in Standard Design Contracts

Standard design industry contracts (e.g., AIA and EJCDC), keep the copyright with the design professional and provide for a limited license to the client/owner for use of the documents. That license is generally limited for use on the specific project only, and does not allow for transfer of that license to third parties. The design industry contracts also include an indemnity provision in the professional’s favor that mitigates risk should those documents be used or modified without proper authority. Most owner generated contracts, on the other hand, demand a transfer of copyright to the owner, and those terms are often agreed to by the professional, presumably because the professional is not fully aware of its rights or the risks involved in giving those rights away. Continue reading “Copyright Rights and Wrongs”

How to Avoid Invalidating Your Professional Liability Insurance

By Lynda

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.

SmartRisk Checklist Can Help Your Firm Shore Up Cybersecurity

By Lynda

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.

a/e ProNet Holds Annual Spring Meeting in Arizona

By Lynda

For the last few sunny days, a/e ProNet members from across the country have gathered in Scottsdale, Arizona for our annual Spring Meeting (March 1-3). a/e ProNet brokers are independent. Technically, we operate as competitors. Membership is by invitation only. We come together voluntarily as recognized leaders in our industry, meeting the insurance needs of architects and engineers. Our combined premium volume, experience, and national reach make our meetings an attractive target for insurance companies, premium finance companies, and other professionals. With our two annual meetings, we keep our fingers on the pulse of the insurance industry and advocate for our clients.

The Spring Meeting

The purpose of our Spring meeting has changed over the last three decades. Invited representatives from the companies and industries mentioned above present to the group on educational topics. This year, attorney David Ericksen of Severson & Werson in San Francisco also organized a series of five panel discussions:

Non-Traditional Project Delivery Methods
Cyber Communication Conundrums
The Prime/Sub Team: Roles, Responsibilities & Risks
Contract and Claims Connections
Material Transparency & Building Green

Ericksen staffed these panels with underwriters, claims adjusters, etc. from companies like Victor O. Schinnerer, AXIS, Hanover, RLI, Beazley, and several other a/e ProNet sponsors. The panel environment increases the awareness of each company regarding their competitors’ products and services. As well, it gives our members a quick, comprehensive understanding of the market’s overall perspective on these issues. Continue reading “a/e ProNet Holds Annual Spring Meeting in Arizona”