Tag: Engineering

Professional Liability Insurance Survey – Engineering, Inc.

By Lynda

For architects, engineers and other design consultants, Professional Liability insurance (Errors & Omissions insurance) can seem like an annual headache. Once a year the app gets dropped in your lap; thus begins a process that, at times, seems fairly–er–intimate.

Cue the bright lights.

Report your billings! Tell us how many jobs you’ve completed! What kinds of projects did you do? What percentage of your billings went to subcontractors? How many employees left your firm? Describe your loss history!

Contracts require the coverage, so there’s no getting around the process, but does it really need to feel like you’re getting the third degree? Is the requested information that important?

According to the 2011 ACEC/AIA/NSPE annual Professional Liability insurance survey of carriers, Professional Liability insurance premium “rates depend largely on four main characteristics:”

  • Annual Billings
  • Type of Practice
  • Claims History
  • Project Types

So, yes. Your application matters every year. Your insurance broker will take this year’s application and place it side by side with last year’s. This can provide the kind of overarching perspective needed to secure fair renewal terms for your firm, both from your current insurance company and from other companies for your comparison. It’s a drill, certainly, but it can save you money and ensure that your firm is appropriately covered based on its unique practice.

Insurance premiums are often a major part of a design firm’s overhead, and the most commonly asked question at renewal time is usually, “Will my professional liability premium be going up this year?”

For an accurate answer, it’s best to go to the source. Sixteen Professional Liability insurance providers responded to the survey mentioned earlier; among them are several of a/e ProNet’s sponsors, including:

RLI, Travelers, Victor O. Schinnerer, Liberty, Beazley, Catlin, HCC

The results of the survey are broken down and explained in the most recent issue of Engineering, Inc. (an ACEC publication); these include some interesting projections about the future of Professional Liability insurance, its underwriting parameters and its premiums.

Though experts do not expect the long-sustained “soft market” to change dramatically, “about half of the carriers that responded… anticipate a slight increase this year. Seventy-five percent of respondents expect price hikes in 2013.”

The full article is available along with the rest of the Engineering, Inc. Jan/Feb 2012 issue here. It goes on to address several more important insurance renewal questions, including:

  • How do I pick a Professional Liability insurance provider?
  • What limits should I purchase? How high should my deductible be?
  • If my business is down, why should I continue to carry Professional Liability insurance?
  • What steps can I take to keep my premium down as the design and construction industries continue to recover?

The full results of the 2011 ACEC/AIA/NSPE annual Professional Liability Insurance survey of carriers will soon also be available at the ACEC website.

Green Projects

By Lynda

By now, most architects and engineers know that green projects are special. They require close attention to a different set of details, further education regarding materials and relevant research, and possibly an enhanced caution when it comes to contracts. You know this. But does your insurance broker?

The following is an excerpt from a newsletter authored by a/e ProNet member Meade Collinsworth of Collinsworth, Alter, Fowler & French, LLC in Miami Lakes, Florida.

“The more I read and research this topic, the more concerned I become with the potential for uninsured claims that can arise out of these projects. In fact, a “green project” is not just another project! I think the very first place that you should begin to review the exposures that arise from green projects would be your client contracts. It is absolutely essential that all contractors review their contracts prior to signing them in order to understand their rights and responsibilities in order to mitigate misunderstandings. This is the reason I am going to concentrate on the contract review process in this articles as I believe this will assist you in meeting your due diligence needs on green projects.”

The full-length PDF version of the article can be found at our website, here.

ProNetwork News: Internal Risk Management – Part 2 of 2

By Lynda

The following is an excerpt from the October issue of a/e ProNet’s monthly publication, ProNetwork News, now public and available on our website.

Excerpted from an article by Drew Seaman and Tom Waggoner of Straub, Seaman & Allen, P.C., St. Joseph and Grandville, Michigan. This is the second of two parts. You may access previous issues of our ProNetwork News here.

“In the last issue, we presented the first of two parts of a practical guide to risk management protocols for the design professional. We first addressed the selection of clients and projects, and recommended that both be assessed in light of your firm’s strengths and culture before engagement.

We then presented a detailed list of tips on how to navigate the sometimes-treacherous waters of the contract. The most important take-away from this section is that your firm needs to establish and maintain a document and contract review process, helmed by your most able staff, and to enlist the aid and counsel of an attorney who is an expert in the field.

We will now address the final four topics in our risk management procedure review:

• Communications

• Contract Document Reviews

• Surveys

• Construction/Contract Administration

Communication

No one piece of risk  management advice is more repeated, or more important, than to document all communications throughout the course of the project. All communications, including oral conversations, should be documented in some fashion.

Your firm’s communication protocol should address these matters:

• Letters, notes, memos, e-mails and plans and specifications

• Protocols for file documentation”

Click here for the full-length PDF version of this article.

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 local a/e ProNet broker for early access to these excellent newsletters.

Skyscrapers

By Lynda

Ten years ago, the tallest buildings in the world were The Petronas Towers in Malaysia. Measuring 1,482 feet (including their decorative spires), they eeked out the top spot in 1998, beating Chicago’s Willis Tower (then Sears Tower) by just over 30 feet. While the record was controversial, the sparkling towers dominating Kuala Lumpur’s new skyline reminded the world of something significant:

You can’t keep a good industry down.

Since then, the record has been broken twice. In 2003, construction was completed on the 1,671-foot tall Taipei 101 in Taipei, Taiwan. Just over six years later, Burj Khalifa rocketed through the record, rising to 2,723 feet above the streets of Dubai, UAE.

Unfortunately, the completion of Burj Khalifa coincided with the crash of the global economy. Today, the massive building is about half empty. Dubai’s government even had to seek a bailout from its neighbor, Abu Dhabi. And yet, for many, the world’s most-skyscraping skyscraper remains an emblem of optimism.

In a global economic climate which has rendered so many industries sedentary, those in the design community have been far from immune, but architects, engineers, and their fellow consultants have found themselves in a unique position. What they produce is visible, tangible, and permanent. And we, the people, going about our lives and succumbing to the struggle, cannot help but notice the product.

Buildings ascend from the concrete, sleek and shining and reflecting the sky. Parks sprout in the midst of concrete chaos, a breath of cool, green air. Bridges span dark waters and bring cities together. The news on TV and the radio and the internet may be bad, but when we see the steel skeleton of a new building coming together down the street, men in yellow hardhats operating heavy machinery, it’s hard not to hope the tide is turning.

Theatergoers paid a total of $31.3 million last weekend to watch 49-year-old Tom Cruise choose to accept his fourth mission as Ethan Hunt in Mission: Impossible – Ghost Protocol. This time Agent Hunt is in Dubai and, in a much-talked-about sequence, he scales the flat, glass walls of Burj Khalifa, dangling more than a thousand feet above the ground. While audiences hang on tightly to their popcorn, their hope pushing Agent Hunt to the top of the tower, they will also see, possibly for the first time, that imposing architectural and engineering marvel, the tallest building in the world, an impressive bit of reality playing backdrop to Hollywood’s thrill ride.

That reality is also a reminder for everyone that it’s okay to ask, “What’s next?”

Architects and engineers may not be racing for the sky in 2012. Rather, some trends point to a renewed desire to practice locally, finding beautifully pragmatic solutions which benefit their own communities. It’s a foundational move, something strong to support a hopeful and enterprising future.