Fun, cool, helpful stuff for Architects & Engineers

Expanding Employment Liability Risks for Design Firms

It’s true. The insurance industry has a reputation for bringing doom and gloom to an otherwise cheery outlook. Forgive us. Our business relies on our being able to spot negative trends in advance so that we can assist our clients in preparing for the worst. That doesn’t mean we don’t also hope for the best! Economic recovery is still ongoing, and we are thrilled that this means our architect and engineer clients are working and growing again.

That’s why, in our May 2012 post, To Hire or Not to Hire?, we mentioned some of the considerations and concerns facing design firms as they take on work that “could require additional hands,” including the need for accurate Professional Liability limits on their insurance policies… just a little worth-thinking-about-in-advance gloom.

Then this week, leading Professional Liability insurance provider, Victor O. Schinnerer, released its most recent Risk Management Guidelines, including an item on the Expanding Employment Liability Risks of recovering architecture and engineering firms.

“As firms downsized to face an economic downturn and restructured due to changing technology and new project delivery systems that required altered business models, employment practices claims rose. Add to that the challenges presented by the new generation of employees—many of whom consider their lives and the operations of their employers as public information, and a number of whom find the workplace to be a forum for their opinions—who are flooding the market during difficult economic times, and by returning military who must be accommodated in their former civilian positions or given preferential treatment, and firms are faced with a demanding and confusing employment perspective as they begin to staff up.”

A few of the areas highlighted by Schinnerer:

Age Discrimination Claims: “Apprehensive and increasingly litigious employees who are seeing their firms restructure for new technology and practice models are no longer hesitant to sue. The Age Discrimination in Employment Act (ADEA) prohibits discrimination against employees over 40 years of age. A common claims scenario is a reduction in force directed at older employees.” Read more…

Religious Expression: “Increasingly a challenge to office productivity, the expression of religious beliefs in the workplace has been protected by a recent court stating that while religious speech may be provocative, it often falls short of actionable harassment.” Read more…

The Cultural Differences of the Young: “From tattoos to piercings to the constant use of Twitter and “too much information” on Facebook, younger employees are challenging what many firms consider to be appropriate behavior. These changed values and social networking may lead to cultural confrontations within a firm. In addition, gender expression, including the more public identification of gay, lesbian, bisexual, and transgendered employees, may lead to office issues. Discrimination or harassment claims are likely to increase.” Read more…

But don’t feel doomed! You can contact your local a/e ProNet broker today if you have questions about these challenges, and whether Employment Practices Liability Insurance (EPLI) is right for you and your firm. You can also read about Schinnerer’s Management Liability offerings on their highlight sheet.