PNN_1310So, you’ve scored a new project! This is a shining moment. The road before you vibrates with the potential for creativity and ingenuity. You receive the contract in your email. Double-click. All you have to do is sign on the dotted line. Scroll, scroll, scroll. Insurance Requirements?

Oh boy. You’d better send this one over to your insurance broker for a quick review.

At lunch, you sketch ideas on the back of your napkin, dying to get started. Buzz! Your phone trembles on the table. It’s your broker and, sadly, she didn’t just give you two big thumbs up. Nope. Turns out, the Insurance Requirements include the following line:

Client shall be named as Additional Insured under CG 20 10 (85) or equivalent.

No-can-do. This endorsement is obsolete. But your new client wants it!  And so you’re face-to-face with the eternal and confounding Additional Insured Conundrum.

Does this scenario sound familiar to you? You’re not alone. The following excerpt from our October 2013 issue of ProNetwork News may be able to help:

The Issue

Recent court decisions and increasingly onerous client demands are creating substantial insurance related difficulties for design firms. This article will focus on the potentially hazardous and surprising consequences of adding clients and others as additional insureds to the A/E’s general liability insurance (CGL) policy(s).

A recent Illinois Appellate Court Decision illustrates this threat: Patrick Engineering Inc. (Patrick) v. Old Republic General Insurance Co (Old Republic). The basic facts are:

Patrick was retained by Commonwealth Edison (Com Ed) to provide engineering services in connection with relocation of utility poles. While working on the project, Com Ed smashed through an underground sewer in at least four separate locations. Subsequently, the local municipality, Village of Lombard, sued Com Ed alleging that it acted negligently. Continue reading “The Additional Insured Conundrum: A/E Firms Face a New and Potentially Growing Liability Exposure”

Tired of reading article after newsletter after white paper after blog post on risk management? (We hope not! But just in case…) Here’s another option:

[youtube https://www.youtube.com/watch?v=C2ioR9X05Qo]

Longtime a/e ProNet affiliate Kent Holland of ConstructionRisk, LLC has translated his impressive catalog of resources into a series of short videos available on the ConstructionRisk.com YouTube Channel.

“If you’re involved in the construction project, whether as a contractor, a designer, or a project owner, you will get real benefit from the practical ideas, suggestions, and law presented in these videos.”

A few of the playlists available now:

J. Kent Holland is a construction lawyer located in Tysons Corner, Virginia, representing design professionals, contractors, and project owners.

Don’t forget the popcorn!

PN - Vol. 21, No.2. 2013 - Building Information Modeling (BIM)Embracing the latest technology can set a design firm apart from the crowd, but it can also set you up for a rough road if you’re not adequately prepared beforehand. Building Information Modeling (BIM) is far from “new” at this point, but some wary design professionals have abstained from it anyway, allowing time to tell whether BIM would be a positive thing for the industry, overall. Good news!

“Building Information Modeling (BIM)… [has] not necessarily opened the door to more claims, as several carriers expected. A few [insurance companies] have found BIM projects to be low-risk; some even went as far as giving discounts to design clients that utilize BIM.” — Engineering, Inc., February 2014

a/e ProNet’s latest ProNet Practice Note, authored by Joseph Barra of Robinson & Cole, can take you from here. The following is an excerpt from Building Information Modeling (BIM): Now that you know how to spell BIM, is it right for you and your firm?

Building Information Modeling (BIM) is the process of developing a virtual, three-dimensional, information rich model to design, construct, and maintain a building project. BIM is much more than software used to produce a pretty 3D graphic. Because a variety of information can be embedded into the model, BIM can also be used to manage the project’s construction schedule (4D); to track project costs (5D); and, once constructed, facility management (6D).

There are varying levels of BIM adoption and use, from an initial pilot project with one player using BIM tools to a team process with agreed-upon collaborative BIM process goals. In ideal process, all project participants share information.

These times are a changin’…

Because BIM is about process and not just software, it gives designers and constructors a unique opportunity to eliminate the barriers to collaborative thinking. One example is found in the redundancies inherent in the shop-drawing process. In this case, the goal of the BIM process is to abolish the wasteful practice of having to draw the entire project twice. Because BIM facilitates teamwork, many see BIM as an opportunity to reach out across disciplines and reconsider the traditional paradigm. Make no mistake, we still need experienced architects, engineers, contractors, and owners to deliver a successful project. But in today’s BIM-enabled world, the process is becoming more collaborative, which in turn redefines the project team’s risk profile.

To continue reading, download the full PDF version of this newsletter, which outlines Factors to Consider before deciding to use BIM (e.g., Type of Project, Timing, Teammates, Project Delivery Method). And if you have additional questions about BIM and/or professional liability insurance, be sure to contact your local a/e ProNet broker today!

EngineeringInc_aeProNetad_2014

Incredibly, even the global economic crisis hasn’t hardened the Professional Liability Insurance market for Architects and Engineers. Today, there are more insurance companies offering A&E policies than ever. And, thanks to the increasing insurance savvy of Design Professionals (particularly those utilizing the services of specialist brokers), new Professional Liability insurers are offering more in the way of risk management and pre-claims assistance, too.

You’ll find all this information and more outlined in the The Hard Market That Never Came, an analysis of the 2013 Professional Liability Insurance Survey of Carriers, in the February 2014 issue of Engineering, Inc. Continue reading “Engineering Inc. – 2013 Professional Liability Insurance Survey of Carriers”

Happy New Year, friends & followers of a/e ProNet! We thought we ‘d take a moment to congratulate our friends over at Victor O. Schinnerer–one of the leading Professional Liability insurance companies in the industry today–on the new, updated Schinnerer Risk Management Blog.

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For a number of years, Schinnerer’s Risk Management Blog has been an excellent source of up-to-date industry news. Recent posts have included:

If you’re an Architect or an Engineer or a Design Consultant, whether or not your current professional liability insurance carrier is Victor O. Schinnerer, their blog is a great place to look for answers to your everyday questions about insurance, best practices, and, of course, risk management. These referenced posts on the old blog, so be sure to check out the archive. We also encourage you to subscribe to the new WordPress blog if you find this info relevant to you and your business.

Make sure to contact your local a/e ProNet broker if you’re interested in obtaining a Professional Liability quote from Schinnerer. Have a great 2014!

pronetworknews_august2013This 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”

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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 COVERAGE

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”

why do i need an insurance brokerAt our fall meeting last month, a panelist asked an important question:

Why is an insurance broker necessary for design professionals? Shouldn’t architects and engineers be able to access insurance companies and purchase Professional Liability policies directly?

Members of a/e ProNet are professional, independent brokers who serve the insurance needs of design professionals. Membership in our association is by invitation only, and members must be experienced and have a minimum number of design professional clients, as well as a minimum amount of premium volume. Our members must also provide their clients with services beyond the sale of a professional liability policy.

In addition to knowing the professional liability marketplace, they negotiate the best product at the best price for their clients. That negotiation happens every year at renewal time, and because our members are independent—not obligated to any one insurance company—they are in the best position to compare and contrast policies. Often, the time and expertise this process requires is underestimated by A/E clients. With a specialist broker, the A/E can rest assured that they have an advocate annually, both in relation to their bottom line and their exposure as a professional in a demanding and risky environment.

Most importantly, though, that advocacy doesn’t end when the renewal has been processed. The rest of the year, our members’ clients can count on their specialist brokers to provide services such as contract review, accredited continuing education, and other risk management services. Continue reading “Why should Architects & Engineers use a specialist Insurance Broker?”

Chicago, IL, October 01, 2013 –(PR.com)– This week, a/e ProNet will hold its annual fall meeting at the Embassy Suites Downtown/Lakefront in Chicago. a/e ProNet is a nationwide network of independent insurance brokers specializing in the professional liability needs of architects and engineers.Members from across the country will convene to meet with representatives from several top-tier professional liability insurance companies and discuss changes in the industry, as well as to participate in a number of smaller events.

Over the course of the three-day meeting (October 2—4, 2013), eleven professional liability insurance carriers are scheduled to make presentations: RLI, Travelers, Hanover, AXIS, Catlin, HCC, Liberty, Beazley, Navigators, AllRisk and Victor O. Schinnerer. Each presentation will include information about the insurance company’s products, policy forms and endorsements, claims, risk management offerings, etc.

On Thursday night, a/e ProNet will host a reception for its members and insurance company representatives, as well as members of the Risk Management Committees of NSPE, AIA and ACEC. The reception will be held at The Rookery in Chicago, a space designed by Frank Lloyd Wright.

Established in 1988, a/e ProNet’s member-brokers represent a combined annual professional liability premium volume exceeding $300 million. At this meeting, a/e ProNet will explore the possibility of extending its scope to include Lawyers Professional Liability insurance. To that end, five insurance companies (Beazley, AXIS Capital, Catlin, Travelers and Ironshore) will present on their lawyers’ professional liability insurance program offerings, as well.

Learn more about a/e ProNet

a/e ProNet offers a wide range of Risk Management resources to all design professionals via the a/e ProNet website including: Practice Notes, Guest Essays, ProNetwork News, Contract Concerns, Typical Coverages and Frequently Asked Questions. For relevant industry news and risk management information, you can also follow The ProNet Blog and/or follow a/e ProNet on Twitter.