Tag: Architecture

a/e ProNet at SDA’s EDSYMPOSIUM12

By Lynda

Longtime design industry advocate, a/e ProNet, announced this week that ProNet President Leslie Pancoast will make a presentation at EDSYMPOSIUM12, the 42nd annual education conference hosted by the Society for Design Administration (SDA), an affiliate of The American Institute of Architects.

For more than 50 years, the SDA has promoted education and best practices for design firm administrative personnel. EDSYMPOSIUM12 will take place from May 2-5 at the Embassy Suites Hotel in Portland, Oregon. a/e ProNet will sponsor Saturday’s luncheon, where Pancoast will make a two-fold presentation: Introduction to a/e ProNet and Professional Liability—Coverages, Nuances and Endorsements. SDA members will learn more about a/e ProNet and its active support for the design industry, as well as receive a brief overview of professional liability coverage and the standard endorsements available from most professional liability insurance providers for architects and engineers.

About Leslie Pancoast

Pancoast has specialized in the insurance needs of architects, engineers and other design consultants for more than 20 years. She is a Managing Partner of Insurance Office of America (IOA), one of the largest privately-held insurance agencies in the country. She is also the Branch Manager of IOA’s San Francisco Bay Area office, operating in California as IOA Insurance Services, which she opened in 2005. Pancoast has earned the designations of Commercial Insurance Counselor (CIC) and Registered Professional Liability Underwriter (RPLU). She has been an active board member of a/e ProNet since 2005, and currently serves as the membership’s President.

About a/e ProNet

Established in 1988, a/e ProNet is a national network of specialist brokers. The group focuses on providing educational resources and risk management services to its members’ clients. Its member brokers represent a combined annual professional liability premium volume exceeding $300 million, giving top-tier insurance companies a major incentive to work closely with a/e ProNet to enhance their various a/e programs.

As well, a/e ProNet makes a wide range of Risk Management resources available to all design professionals via their website, including ProNet Practice Notes, Guest Essays, ProNetwork News, Contract Concerns, Typical Coverages, and Frequently Asked Questions.

a/e ProNet is excited about the opportunity to partner with the SDA in order to provide this value-added educational resource to design firm administrative personnel across the country.

Additional information is available about a/e ProNet by visiting their website, following them on Twitter, and/or Liking their Facebook page.

Right of Set-off on Unrelated Projects

By Lynda

The following is an excerpt for the most recent ProNet Guest Essay by Frank L. Pohl, Esq. and James C. Washburn, Esq.:

“Frequently, general contractors will work with the same subcontractor or supplier on two separate, unrelated projects. When that happens, the situation may arise that on the first project (Project A), the subcontractor defaults on its contract, resulting in a back-charge that exceeds the subcontractor’s contract balance, i.e. the subcontractor owes the general contractor money. On the second project (Project B), the subcontractor satisfactorily completed its work and is due money from the general contractor. It may seem obvious that the general contractor would have a right of set-off, allowing the general contractor to deduct the amount due from the subcontractor on Project A from the amount that the general contractor otherwise owes the subcontractor on Project B. Seemingly, the general contractor should only have to pay the net difference or be able to avoid paying the subcontractor anything if the back-charge on Project A exceeds the amount due on Project B. However, as outlined in this article, that seemingly straight-forward right to “net out” the competing claims might not always be available.

“There are several different factors that can frustrate the general contractor’s right of set-off. In some jurisdictions, state statutes may prohibit the general contractor from withholding from the subcontractor the amounts received from the owner for the subcontractor’s work, such statutes holding that those funds are held in trust for the benefit of the subcontractor. Some states might even find the withholding of funds received by the owner for the subcontractor’s work to be statutorily criminal. On projects covered by a payment bond, courts in some jurisdictions have held that even if the general contractor has a contractual right to set-off, the Surety may not. As a result, in those jurisdictions, notwithstanding the contractor’s contractual right of set-off, the subcontractor may be entitled to recover the full amount on Project B (from our scenario above) from the Surety without any deduction of the amounts the subcontractor owes on Project A. Given that the general contractor must almost always indemnify the Surety, such a result has the practical effect of eliminating the contractual benefit of a right of set-off. Additionally, in certain circumstances, by the discretion afforded to judges under the rules of civil procedure, courts have required the two competing claims to be handled by separate lawsuits independently and without regard to the general contractor’s claim of set-off. This article discusses these scenarios and others that impact the right of set-off.”

To continue reading, download a the full PDF version of this article at our website.

About the Authors:

Frank L. Pohl, Esq. and James C. Washburn, Esq. are partners in the law firm of Pohl & Short, P.A. in Winter Park, Florida.  Pohl & Short, P.A. is a business boutique law firm concentrating in four main areas of business law: commercial litigation, real estate law, corporate law and trusts and estates.  Mr. Pohl has been advising clients involved in all aspects of real estate development for over 30 years.  Mr. Washburn practices construction law and is Board Certified in Construction Law by The Florida Bar.

This article is intended for general discussion of the subject, and should not be mistaken for legal advice. Readers are cautioned to consult appropriate advisors for advice applicable to their individual circumstances.

ProNet Client Project Profile: Mark Cavagnero, FAIA

By Lynda

The AIA recently published a profile of a/e ProNet client Mark Cavagnero Associates of San Francisco, CA. This year alone, this highly acclaimed firm has received the AIA California Council Firm Award, the Contract Interiors Award for Historic Restoration (UC Berkeley Durant Hall), and the IIDA Northern California Chapter Merit Award (East Bay Center for the Performing Arts). A full list of Cavagneros projects, clients, and awards can be found here.

The following is an excerpt of the AIA article entitled Mark Cavagnero, FAIA: Growing Big Ideas:

In 28 years of architectural practice, Mark Cavagnero, FAIA, has come to realize that his job is to give words and meaning to this voice that communicate ideas about clients, organizations, and communities… Cavagnero works mainly with public nonprofits and what he refers to as other “nonprofit-like” institutions. In addition to government clients at the city, state, and federal level, his firm works with cultural and educational institutions such as the Fine Arts Museums of San Francisco, the Oakland Museum of California, and the California Film Institute. Not surprisingly, when asked to distill key lessons from his years of practice, his thoughts immediately drift to concept and vision. Cavagnero has learned that it takes patience, active involvement, leadership, and a broad, generous understanding of function to execute a big idea, whether for a nationally recognized museum or a small community pool.

According to the company bio, “Mark Cavagnero Associates’ design process begins with a careful investigation of the client’s goals and the project site… The firm welcomes the constraints of program, site, and budget as frameworks within which to create engaging architectural spaces. It is in the focused response to these project elements that the essential character of each project finds its voice. The purity of response—in form, material, and relationship to light and context—is always the firm’s goal.” To read more about Mark Cavagnero Associates, visit the firm’s website.

We applaud this recognition of Cavagnero as an architect who champions the broader ideals of his field, and we urge everyone to read the full profile here. 

ProNet Client Project Profile: Parish of St. Sophia – Valley Forge, PA

By Lynda

In honor of Easter Monday, we’d like to give a shoutout to a/e ProNet client CJK Design Group of San Francisco, California.

For CJK’s Founder and Principal, Christ J. Kamages, Architecture is spiritual work. The deep Christian Orthodox traditions of the Kamages family led Christ to consider a career in the priesthood. But an apprenticeship with Christopher Kantianis, AIA in Boston in the 1960s exposed him to architecture, design, and Byzantine theories and styles. An MIT science fair award for Byzantine Architecture, where he elegantly demonstrated how to place a round dome on a square base, permanently sealed his career and life mission. (Full Bio for Christ Kamages)

Kamages and his Design Team have a proven record of over two-hundred successfully completed projects. They stand ready to provide premier services that are reflective of each client’s vision and aspirations. Their deep appreciation of the spiritual diversity of their clients, their traditions and aspirations, has a major impact on CJK’s design approach and sensibility. (Full Vision for CJK Design Group)

On March 10, the Dome & Drum, Pendentives and Apse of the new Parish of St. Sophia in Valley Forge, Pennsylvania were revealed to a crowd of spectators. The impressive Byzantine temple was designed by a/e ProNet client CJK Design Group of San Francisco, California. Dr. George Kordis, the internationally renowned Iconographer, was present to give a short talk on the theological significance of the iconography inside the dome. The next day, the Parish blessed the 6th Century Justinian-inspired Crosses, also designed by CJK Design Group, and raised them into position over the enormous copper domes.

More details about the project, including photos of the dazzling iconography, can be found at PROCESS, CJK’s blog.

Congratulations to the Parish of St. Sophia on a spectacular new facility, and congratulations to CJK Design Group on a design both functional and beautiful, which stands as a beacon of the Orthodox faith.

Your Company’s Auto Liability – What’s Covered? What’s Not?

By Lynda

Other than Professional Liability claims, Auto Liability claims are the largest exposure faced by Architecture and Engineering firms.

If your design firm is small to mid-sized, often “a standard BOP (Business Owner’s Policy) is sufficient to meet your property and casualty coverage needs. A BOP combines the basic coverage requirements a small to medium sized business owner would need in a package.” Those insurance companies that understand the specialized needs of design firms sometimes combine certain coverage enhancements within their standard BOP. These enhancements can include extended coverage for architectural models, a waiver of subrogation (as is often required by project Owners during contract negotiations), and even some limited Auto Liabilty coverage.

“If your firm does not own any autos, the BOP can usually include ‘Hired and Non-Owned’ auto liability coverage. This would pay for damages to a third party, on behalf of your company, if an employee causes an accident while using a rented car or the employee’s own car while on company business. This addresses liability to others, but what about damage to the rented car? Some but not all insurers will provide this protection in a BOP; it’s usually referred to as Hired Physical Damage coverage.”

Our latest ProNetwork Newsletter, Your Company’s Auto Liability – What’s Covered? What’s Not?, focuses on the necessity of this coverage. A coverage which, if both architect/engineer and broker aren’t careful, can be overlooked at renewal time.

What does Hired Physical Damage cover? And why/when would you need this coverage?

Your star employees requests permission to attend a conference hosted by your state professional society. The conference is about 200 miles away. Public transportation isn’t an option; therefore, with an eye toward keeping expenses down, your employee decides to rent a car to drive to and from the event in one day. He asks you about taking out the rental car company’s insurance coverage. You mean to call your insurance broker, but, pressed for time, you decide that the BOP must cover this and you know that the extra insurance from the rental company would cost anywhere between $15 and $50 for the day.

Tragically, on the way home, your employee swerves to avoid some large debris in the roadway and inadvertently hits an oncoming car with a young adult driver and three co-workers who were headed home from a client’s golf outing. No one is killed, and fortunately your employee walks away unharmed. The other four, however, are not as lucky. All four are hospitalized, miss time from work, and require significant rehabilitation. Both vehicles suffer total loss.

To read about the outcome of this “doomsday scenario,” and to understand how Hired Physical Damage coverage can help, download the full PDF version of our newsletter here.

ProNetwork News is the latest value-added resource produced by a/e ProNet. Each monthly edition includes an informative, timely article relevant to the design industry and authored by an industry expert. Contact your a/e ProNet broker for early access to these excellent newsletters.

About the Author: Barbara Sable is Assistant Vice President for RLI’s Professional Services Group. She is responsible for developing the content of RLI’s risk management programs and addressing the day-to-day needs of policyholders. RLI is an a/e ProNet Platinum Sponsor.

FAQ Arising out of Contract Negotiations

By Lynda

Contract negotiations can be tough, and this is especially true for Architects and Engineers (A/Es). When an A/E is hired by an Owner who lacks prior experience with the nuances of a design professional’s insurance policies, or when an A/E is hired by a contractor (rather than by another design professional), misconceptions and poorly worded Insurance Requirements can fuel adversity in the negotiation process.

The easiest way to avoid deadlock is for the A/E to ask questions of their insurance brokers in advance, thus preparing themselves to educate the other interested parties about the realities of an A/Es insurance coverage. Some frequently asked questions which arise in these negotiations are:

The Owner/Contractor wants to be added to my Professional Liability policy as an Additional Insured. Why can’t I add Additional Insureds to my Professional Liability (E&O) policy?

“A common misunderstanding about E&O insurance involves a client’s desire to be added as an additional insured and to gain a defense through the E&O policy. A/Es cannot add additional insureds on their E&O policies because the other entities are not providing services on behalf of the firm. E&O insurers will not provide this coverage, thus a contractual obligation to do so becomes an impossible situation for the A/E. E&O policies typically also have an ‘insured versus insured’ exclusion in which there is no coverage for claims between insureds. If a client became an insured under the E&O policy, the A/E would not be covered for the client’s claim.”

What does indemnification mean?

“To ‘indemnify’ does not mean that a claimant can profit from the A/E’s errors or negligence – it means that the claimant should be restored to the position they were in prior to the loss; they should be ‘made whole.’ As an example, if an A/E failed to specify interior doors on a new office building, the owner/client would not get ‘free’ doors as damages, but would instead be indemnified for additional expenses caused by adding the doors after the bidding process (e.g. additional shipping, extra installation charges, increased cost of the materials ordered at the later date, etc.).”

The Owner doesn’t want there to be a Contractual Liability Exclusion in my Professional Liability policy. What is a Contractual Liability Exclusion and does my policy have one? 

“Yes, E&O policies also contain a ‘contractual liability’ exclusion which will not cover liability assumed by contract unless liability would exist absent the contractual undertaking.This exclusion is meant to protect the A/E from overextending themselves in an effort to protect a client.

“It is worth noting here that an Architect or Engineer does not have corporate protection (no ‘corporate veil’) from personal liability arising out of the performance of professional services. When considering the severe risks they may be assuming when providing design services, it is no wonder that the Architects and Engineers take contract negotiation and insurance coverages very seriously.”

Portions of these answers have been excerpted from one of our ProNet Guest Essays, this one titled Architects’ and Engineers’ Insurance — What does it cover? The essay, authored by a/e ProNet Member Diane Hoskins of Wortham Insurance & Risk Management, goes on to answer several other FAQs. Download the full PDF version here.

How to Choose a Professional Liability Insurance Broker

By Lynda

Recently, Bizjournals.com published an article on How to choose an Architect. The author stressed that the hunt for the right architect should include obtaining recommendations from friends and colleagues, calling a potential architect’s references, and studying his or her previous projects to ascertain quality and sustainability.

This process isn’t news to architects. Every job bid opens an architect’s firm and history to scrutiny, and that’s all part of an owner’s due diligence. What architects and engineers might not consider is that this logical due diligence should extend to them in the selection of their own insurance broker(s).

Remember, “Not every attorney can deal with the problems you are likely to find yourself faced with in professional practice; not every doctor can perform heart surgery; not every insurance broker can deliver the professional liability loss prevention and insurance services you need. Knowing this, it would seem to make sense for you to spend a certain amount of time searching for a broker capable of responding effectively to the unique requirements of your firm.”

a/e ProNet has put together a guide to finding the best specialist insurance broker for your design firm. Authored by David Lakamp, the founder of a/e ProNet, this guide addresses the qualities and qualifications you should require of the broker handling something as important as your Professional Liability policy. The following is an excerpt from our ProNet Practice Note titled How to Select a Professional Liability Insurance Broker:

Your professional liability insurance broker can deliver services of great value. This is as it should be, for you are paying for those services. Carefully selected and advantageously used, your broker can be as important to the management of your practice as your accountant or your attorney. Poorly selected and ill-equipped to advise you on the risks of professional practice, your broker may add little more of value to what you do than the cost of a few postage stamps at renewal time. The choice is yours.

There are many people in the insurance business, but finding the one broker best for you can be somewhat problematic. For one thing, your broker can be of real help to you only if he or she has a comprehensive understanding of what it is you are all about. Not all do. For another, the most valuable services your broker can deliver require an investment of time and resources few are prepared to make. Fortunately, there are knowledgeable brokers throughout the country who have made that investment. Your challenge is to find one you can rely on with confidence.

What a Good Broker Can Do For You

Your broker, first and foremost, is your advocate in the professional liability insurance marketplace. A good broker will know what the markets are doing, who the underwriters are, what they are looking for, and how to present your firm in the best possible light. This requires a thoroughgoing knowledge of the applications for insurance and a clear understanding of what the questions really mean, how the information being requested is likely to be interpreted, and how that information can best be communicated to the underwriters. The cost of your insurance will depend on this knowledge and on the skill and attention to detail with which it is utilized on your behalf.

A skilled professional liability insurance broker will be experienced in dealing with the underwriters in both hard and soft insurance markets. Today’s promises and prices may be real, or they may be of fleeting value. To evaluate the differences, you need competent, independent advice from a broker who is capable of a long look down the road ahead. Experienced brokers have been down this road before, and the value of the advice you receive as you seek to sort out the trade-offs between coverage options, company services, and premium dollars depends on that experience.

Other valuable questions answered by this ProNet Practice Note:

  • Why is it important to choose a specialist insurance broker?
  • How will I know a specialist insurance broker when I see one?
  • Where can I get good recommendations for specialist brokers in my area?
  • When I purchase insurance, why shouldn’t price be the bottom line?
  • What is the difference between an independent insurance broker and an insurance agent?
  • What questions should I ask an insurance broker to make certain he or she fits this criteria and will offer the best, specialized service to my architecture or engineering firm?

We invite you to download the full-length PDF version of this ProNet Practice Note here. For additional resources like this one, visit our website. And as always, the easiest way to find a specialist insurance broker for your firm is to get in touch with your local a/e ProNet Broker.

Construction Administration Liability Risk Avoidance

By Lynda

So, your architecture firm is preparing to sign a contract on a new project. You’ve reviewed the wording with your insurance broker and attorney. You feel good about the language, the limitation of liability, and the scope of services outlined therein. (And you feel even better about the fees you’ll be collecting along the way!) But before you scribble your name on the dotted line, it is important to remember that the black and white words in the contract only go so far.

The signed contract is only the first (if the most major) verifiable communication between the interested parties: Architect and Owner. As the project progresses, you’ll be communicating with the owner many more times, not only for changes and modifications to the design, but depending on the scope of your responsibility when you visit the job site, you may be keeping the owner apprised of progress. More importantly, you may be alerting the owner to problems!

Stepping outside your scope when it comes to construction administration is a risk and may leave your firm vulnerable to claims. Likewise, dealing directly with contractors without remembering your relationship to the owner (“the law will treat the architect as the owner’s agent”) is also risky. In his newsletter titled Construction Administration Liability Risk Avoidance, William L. Coggshall of Archer Norris covers some of the steps an architect can take to manage these risks.

The following is an excerpt of the aforementioned newsletter published in February of 2010. For access to the full-length PDF version of this newsletter, please visit our website.

Professional liability claims against architects generally fall into two different categories. The first type of claim is errors or omissions in the architect’s design drawings and/or specifications. The second type of claim is that the architect failed to properly perform its construction administration services pursuant to the generally accepted standard of care in the industry. Of course, there are instances where both types of claims are alleged.

The new AIA Standard Form Agreement between Owner and Architect (B101-207) describes construction administration services as ‘Construction Phase Services.’ An understanding of the nuances of these services and how claimants view the role of the architect is a key to educate architects (also applies to engineers and land surveyors) and to better equip them to avoid professional liability claims.

While the term ‘construction administration services/construction phase services’ encompasses a variety of services by the architect (i.e. evaluations of work, certificates for payment, submittals, changes in work, and project completion), the focus of this article will be on the architect’s construction observation services (described in the AIA documents as ‘Evaluations of the Work’). The intent is to give the architect an understanding of how to effectively handle their construction administration site observations in such a manner in order to help protect the professional from construction administration services liability claims, or at a minimum, to have the appropriate factual defenses to such a claim should a claim be made by the project owner.

The three pillars of properly executing the design professional’s construction administration site observation services can be summed up as the ‘Three C’s’ – Control, Competence, and Communication.

Access the full-length PDF version of the newsletter here.

About the Author: William L. Coggshall is a litigator with the Archer Norris professional liability and construction practice groups, specializing in the representation of architects and engineers in complex commercial litigation. The lawyers in our Design Professionals Liability practice group provide advice and litigation support to architects, engineers and other design professionals. 

Newsletter provided by a/e ProNet Member Melissa Roberts of Euclid Insurance Agencies.

This article is intended to provide Archer Norris clients and contacts with general information. The content of this publication is for informational purposes only. Neither this publication nor its authors are rendering legal or other professional advice or opinions on specific facts or matters. No attorney-client relationship is created by this advisory, nor by any response to the information herein, unless and until a conflicts review has been conducted by Archer Norris, and a written agreement containing all terms of representation has been signed.
Copyright © 2010, Archer Norris, PLC.
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Don’t Delay! Report That Potential Claim Today!

By Lynda

A Professional Liability claim is triggered by a demand for money or services. Once you receive such a demand, it’s easy enough to call your broker and report the claim. But what about reporting a situation that could give rise to a claim?

Say you’re standing on a job site, eyes wide, jaw hanging open, because you see that something isn’t right. You expect that the situation you see before you could (likely, will!) give rise to a claim, but you can’t be certain. Nor can you be sure that the accident/flaw/behavior/error be held against your firm, specifically. And maybe it’s fixable in the meantime. What should you do?

It is in the best interest of your firm to call to your broker anyway. Report the potential claim.

The following is an excerpt from our ProNet Practice Note entitled Reporting Claims and Potential Claims Under Professional Liability Insurance Policies (2010):

Early reporting has many rewards. Let’s look at an actual situation: An architect called his insurance broker to tell her that a one-ton balcony collapsed adjacent to a recreational pool area. The broker immediately notified the insurance company, who put the design firm in contact with a lawyer to start gathering information and to remind the principal of appropriate responses during the crisis. The insurer then hired a forensic engineering firm, all before the architect even pulled into the parking lot!

In addition, the broker offered her client tips on good public-relations skills when facing the media—still during their drive to the site. The architect was prepared with an alternate solution when his client wanted to sweep up and remove the debris, thereby erasing a critical part of the story should a claim be made later.

Reporting a circumstance or claim should begin your access to the power of your insurer, including its expertise, network of consultants and attorneys, and financial resources. You will not only get valuable assistance with the loss or possible loss, but you also often avoid making a bad situation worse.

What if our architect had told his client, “Don’t worry, I’ll take care of it” before his negligence was established, thereby possibly accepting financial risk without insurance coverage? Every claims adjuster has sad stories like this to tell. This is most common when a design firm receives a subpoena for testimony before being made a party to the action. Feeling they are fulfilling their civic obligation, they freely discuss matters with opposing counsel in what they may later consider an unwise fashion after they are joined in the claim and find that their casual, on-the-record comments harm their own case. Early advice from the claim adjuster can be invaluable.

Even if, later on, this policyholder discontinues their insurance or purchases coverage or options that are less favorable than they currently have, this claim will be covered under the terms and conditions of the policy in place on the date the circumstance was reported to the insurance company.

Even if you are not obligated to report a circumstance according to your policy requirements, you may still report it. By doing so, you will have more options to choose from at your next renewal. You may not ultimately decide to switch to a different insurance company, but you should have the freedom to do so. Unless the matter is reported, you are not free to consider other insurers, lest a claim arise with the new insurer from an unreported circumstance of which you were previously aware.

Visit the a/e ProNet website for additional information on this topic as well as many others. A full library of ProNet Practice Notes are available for free download.