Design Archives - Page 5 of 6

Insurance 102: Property Coverages for Architects & Engineers

By Lynda

This 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”

Koning Eizenberg Wins at World Architecture Festival

By Lynda

We’d like to congratulate Santa Monica architecture firm Koning Eizenberg on their recent win at the 2013 World Architecture Festival! They received the prestigious Housing Award for their 28th Street Apartments project in Los Angeles, California.

The World Architecture Festival, held in Singapore earlier this month, gathered over 1,750 architects from around the world to exchange ideas and inspiration for design. This year, only 15 of the 260 shortlisted projects were from the USA, and Koning Eizenberg was the only American firm to receive an award.

Referring to the 28th Street Apartments, the judges noted: “This project demonstrates architecture as an agent for social transformation. The architect was able to knit together historical continuity and something very new, something of high architectural value.”

Koning Eizenberg’s website describes the project this way: “The restoration and expansion of a landmark YMCA built in 1926 restores principal spaces, reconfigures original housing, and innovatively adds replacement units. The design re-establishes this building’s role as an important community focus and brings living quarters in compliance with contemporary standards.” Read more on their website.

It’s so exciting to see our members’ clients set themselves apart on the world stage this way. Well done, Koning Eizenberg!

Shout-Out Credit:

Alicia K. Igram, AAI, VP & Branch Rep
Design & Consulting Liability Specialist
IOA Insurance Services – Aliso Viejo, CA
Email: Alicia.Igram@ioausa.com / Phone: 949-680-1789

Leddy Maytum Stacy Architects No. 1 in Sustainable Design

By Lynda

a/e ProNet client Leddy Maytum Stacy Architects of San Francisco has been named to Architect Magazine’s Architect 50 again, and this time they’ve received a top honor!

Earlier this year, we blogged one of LMSA’s award-winning sustainable projects, the Merritt Crossing Senior Apartments in Oakland, California.

Find out more about the Architect 50 at Architect Magazine’s website, including the Top 50 Business, Top 50 Design, and Top 50 Sustainability.

Congratulations, LMSA!

Shout-Out Credit:

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

A New A&E Resource: Beazley Pro Inaugural Issue

By Lynda

One of the several excellent insurance companies a/e ProNet works with has a new risk management resource for their professional clients: Beazley Pro.

We think our readers will be most interested in the Claims Corner; three scenarios, three discussions, three lessons learned. An example of a claim outlined in the Summer 2013 issue…

Engineer granted rare summary judgement

Facts: After sustaining serious injuries in a fall in a sports facility parking lot, the plaintiff sued the property owner, who in turn filed a third-party action against our insured, an engineer. This suit against the engineer alleged that deficiencies and code violations in his design of the facility’s parking lot (specifically its handicap access ramp and lighting) were to blame for the fall. A site visit revealed that the lighting and lighting tower location in the parking lot were not as the engineer had specified. During deposition, the paving contractor affirmed that he used the engineer’s plan for pricing only, not for construction. Hence, there was no causal connection between any design deficiencies in the engineer’s plans and the plaintiff’s serious fall and injuries. Counsel moved for summary judgment, which was granted in full. Continue reading “A New A&E Resource: Beazley Pro Inaugural Issue”

a/e ProNet Partners with the Society for Design Administration (SDA)

By Lynda

In May this year, the Society for Design Administration (SDA), the nation’s largest professional organization for architectural and engineering design firm administrators and managers, announced its endorsement of a/e ProNet.

The proper management of professional risk factors such as contract administration, project administration, and document management are known factors in reducing professional risk in a/e firms. Both SDA and a/e ProNet are dedicated to providing a/e firms the necessary tools to better manage risk and improve firm management. ~ Deborah A Gill, CPA, CGMA, CDFA, 2013 SDA President

As announced in the June/July 2013 issue of SDA Today, “a/e ProNet will pay one half of a new SDA member’s dues if that member’s insurance agent belongs to a/e ProNet… Chapters can partner with the local broker and reach out to principals and managers in their network.”

a/e ProNet and the SDA will also collaborate on a number of educational events, including the SDA’s annual EDSymposium conference. Last year, past a/e ProNet President, Leslie Pancoast, made two presentations at EDSymposium12 in Portland, Oregon, and current a/e ProNet President Jeff Todd spoke at EDSymposium13 in Williamsburg, Virginia earlier this year.

We look forward to a long and successful partnership with the SDA.

Need CE Credits? a/e ProNet’s Contract Review Guides Can Help

By Lynda

Looking for a convenient way to fulfilll your AIA Continuing Education credit requirements? a/e ProNet can help.

In the past few years, a/e ProNet has published two risk management guides for the design industry: Risk Management & Contract Guide for Design Professionals and Risk Management for Design Professionals in a World of Change. Both include courses at the back of the book, which have just been renewed with the AIA for credit for an additional 3 years.

Our books and access to the courses are available for purchase on our website, but you can receive a discount for both by requesting copies from your a/e ProNet broker. (And if your broker isn’t an a/e ProNet member, call your local a/e ProNet broker today!)

Read on for details about both contract review guides… Continue reading “Need CE Credits? a/e ProNet’s Contract Review Guides Can Help”

California Court Upholds Contractual Statute of Limitations Provision in AIA Standard Form

By Lynda

California architects can breathe a little easier. Filed June 3, 2013, the Court of Appeals decision in Brisbane Lodging, LP v. Webcor Builders, Inc. held that the section 13.7.1.1 of the 1997 AIA Standard Form of Agreement between Owner and Contractor is enforceable.

This is good news for Design Professionals, as section 13.7.1.1 shortens the statute of limitations period to four years and effectively abrogates the delayed discovery rule in California.

Per an announcement email recently received from Jacqueline Pons-Bunney, a partner at law firm Weil & Drage:

The case involves a contract between an owner and a contractor for the construction of a hotel. The clause at issue reads:

“any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than such date of Substantial Completion.”

Substantial completion at the subject project was July 31, 2000. In early 2005, the owner discovered a break in the sewer line which caused waste to flow under the hotel. It was determined that the plumbing problem was a latent defect. Both the contractor and its plumbing subcontractor investigated the problem and attempted repairs. It was ultimately discovered that the plumbing subcontractor had installed ABS pipe rather than cast iron pipe for the sewer line, in violation of the Uniform Plumbing Code. The owner filed a lawsuit in May 2008. Continue reading “California Court Upholds Contractual Statute of Limitations Provision in AIA Standard Form”

How to Get a Design Professional to Work For Free!

By Lynda

Now that we have grabbed your undivided attention, the purpose of this article is to alert Design Professionals to an alarming trend. This trend involves the inclusion of contract provisions in agreements prepared by Owners/Developers and their attorneys that force a Design Professional to work for free in the event that the Owner/Developer unilaterally determines that there is a “dispute.”

Overview

It goes without saying that every contract, especially in the design field, must be read thoroughly before it is signed, or the signer will be stuck with the ramifications. Generally speaking, the clauses in question here state that in the event of any dispute between the Owner/Developer and Design Professional, the Owner/Developer may withhold payment until the dispute is resolved, but the Design Professional must continue to perform services. This upsets the historical balance of power between the Owner/Developer and the Design Professional and creates a situation where the Design Professional may very well end up working for free or else be faced with being sued if they stop work or suspend services. Continue reading “How to Get a Design Professional to Work For Free!”

War Stories: Real Life Claims Stories from Architects & Engineers

By Lynda

Photo via Victor O. Schinnerer's War Stories: Budget Buster — Photo via Victor O. Schinnerer’s War Stories: Budget Buster

I shouldn’t need to buy insurance! I’ve never had a claim.

This is a common refrain from architects and engineers purchasing professional liability insurance for the first time. We hear you. There are lots of design professionals who feel this way. That’s why it’s important to recognize that insurance isn’t about punishing you for past claims; it’s about protecting you from future claims. Contractual insurance requirements aren’t merely expensive obstacles to bidding for a job; they’re supposed to protect the individual parties from the far more expensive burden of an uninsured professional liability claim. And, like it or not, industries like Architecture and Engineering are rife with potential claims.

Oh yeah? Like what?

Don’t just take our word for it. Check out this library of War Stories and Claims Scenarios from Architects, Engineers, Surveyors & Consultants, an excellent resource offered by Victor O. Schinnerer, one of the leading Professional Liability insurance companies. These are real life claims stories. Here you can read through scenarios which happened to other firms, often in spite of their best efforts to avoid such things! While the names have been changed, details are included. In each case, you’ll find out what the mistake was. How it was made. How much it ultimately cost. How it could have been avoided.

A couple of examples from the War Stories library:

Budget Buster

ABC Engineers provided design services for a residential project. The owner obtained a construction loan from a bank for $2.7 million; believing he could obtain additional funds from the bank if needed. As construction progressed, they expended the $2.7 million budget before the project was complete. The bank believed $2.7 million was adequate to complete the project and denied the owner’s request for an additional $1.3 million. The owner could not obtain additional funds and the contractors stopped working, leaving the project incomplete. Read more at Schinnerer’s website…

Due Diligence is Due

Gerard Coins Architecture, a sole proprietor, was retained by a housing authority to provide architectural design for Blanket Apartments, a low income housing development. Gerard Coins Architecture also provided mechanical design, which was permitted by state law. The architect’s design called for standard, 30 gallon water heaters but the owner wanted electric, tankless water heaters instead. The architect checked with a supplier and based on verbal information, sized the water heaters for the apartment units.

After the apartments were built, it was discovered that the water heaters did not supply enough hot water. The architect contacted the water heater manufacturer who told him the water heaters were intended to be used at a source, such as a sink or bathtub—not to heat the water for an entire apartment. Read more at Schinnerer’s website…

Risky Inspection

Homer Watkins Engineering, a civil engineering firm, was retained to provide a limited inspection and design report for a historic building. Several years later, they provided an inspection report for the sale of the same building.

A painting contractor employee, who was working on the historic building, fell three stories sustaining serious injuries after the railing collapsed on a balcony he leaned against. The painting contractor employee filed suit claiming he was permanently, partially disabled and disfigured. After filing suit against a number of parties, Homer Watkins Engineering’s inspection report was found during discovery and the suit was amended to add them.

The painting contractor employee contended that while Homer Watkins Engineering’s inspection report put the new owner on notice that the railing was too low and posed a safety hazard, it did not go far enough in warning the owner that it should be fixed immediately. While it was felt the height of the railing had nothing to do with the fall, the defense counsel felt the inspection report should have been more detailed as it was dealing with a very old brick and wood building that may have had weaknesses requiring more investigation. Read more at Schinnerer’s website…

Protect yourself and your firm from situations like these by purchasing a Professional Liability policy tailored to the specific needs of design professionals. Our members are specialists in this field, so find and contact your local a/e ProNet broker today.