pronetworknews_nov2012If you have ever gone car or shoe shopping with and for someone else (teenagers and significant others, in particular), you know the difficulty and frustration that usually follows efforts to fit and style those with strong opinions and feelings on the subject. Such shopping is more an effort in very personal comfort, feel and perception than utility. The same can be true for design professionals’ scope of services. The most recent economy has left design professionals to suffer earliest, longest and hardest, particularly those that rely on residential development. To keep busy, some A/Es are marketing a broader scope of services, including services historically reserved for construction contractors. The comfort, feel and perception of such expanded scopes of services are highly personal but come with distinct and practical liabilities and risks. Like finding the right shoe size or vehicle type, A/Es can manage expanded risks with properly fitting contracts, insurance and professional structure.

SUV v. Sedan and Dress Shoe v. Cleats

In annual magazine reviews, sedans are compared to sedans and SUVs are compared to SUVs. The same is true of legal standards by which different roles are judged. A/Es provide a professional service and are compared to other A/Es by a standard of care – what others in the same profession are doing or would have done for a similar project. A/E contracts typically take care to adhere to recitations of the baseline standard of care and avoid or disclaim responsibility for means and methods, safety, warranties and the contractor’s timely or proper performance.

Contractors provide a finished product which is judged by a good and workmanlike standard: a warranty of quality, timeliness and, usually, safe performance of the work. Contractor agreements therefore give the contractor control over and responsibility for means and methods, safety, warranties, schedule and performance.

Crossovers and Hybrids

There is a line between trucks and cars, but there are luxury SUVs and crossovers to blur the line and offer compromises of varying degree.  The line between A/E services and contractor services has become equally fuzzy.  Try to explain in words the difference between the scope of services of a Construction Manager/Advisor, a Program Manager and an Owner’s Representative. For example:  The label is less important than the intended division of responsibility, control and money, and how that is expressed in a contract.  Continue reading “Architects Step Into Contractors Liability, Size XXL”

As the world rings in 2013, The ProNet Blog is celebrating its one year anniversary. We had high hopes for the blog at the start of 2012, but those expectations have been exceeded in every way. In the last 12 months, we’ve posted 68 articles on architecture and architects, engineering and engineers, and the insurance industry that backs them up. This has allowed several thousand visitors to find the information they wanted and needed.

Burj Khalifa 2012 Fireworks. Photo via
Burj Khalifa 2012 Fireworks. Photo via

In the spirit of hopefulness that should belie the eve of any new year, we turn now to what got us off to such a great start last year, Burj Khalifa, the tallest building in the world, and one which is dominating headlines this New Year’s Eve.

For starters, tonight’s fireworks display is highly anticipated. One Lebanese businessman is reported to have shelled out almost $20,000 to spend New Year’s Eve in a 7,000 sq-ft penthouse apartment in downtown Dubai with an excellent view of Burj Khalifa. He’s just one of the more than one million people expected to party-in the new year Dubai-style. Good news! For those of us who can’t quite make it downtown by midnight, we can watch the Burj Khalifa fireworks live on YouTube!

Besides, squeezing in close to the overwhelming structure might be better in theory than in fact, especially given Kate Ascher’s recent  interview with NPR’s Terry Gross. The author of The Heights: Anatomy of a Skyscraper revealed that, as put it, “Yes, the tallest structure built by man could also be considered to be the smelliest.”

GROSS: Well, it really illustrates one of the paradoxes of modern life, that we have these just incredible structures that reach, you know, that seem to reach to the sky and then in a place like Dubai you have a 24 hour long line of trucks waiting to dispose of the waste from those buildings.

ASCHER: Right. Well, you know, you have to remember that a place like Dubai really emerged in the last 50 years. It was a sleepy, you know, Bedouin town half a century ago. And what you do is when you bring in the world’s, you know, most sophisticated architects and engineers, you can literally build anything, including a building of 140 or 150 stories. But designing a municipal network of sewage treatment is in some ways more complex.

Supermodel & Superskyscraper. Photo via Emirates 24/7.
Supermodel & Superskyscraper. Photo via Emirates 24/7.

Maybe the smell explains why, earlier this month, supermodel Heidi Klum tweeted a picture of herself with the superskyscraper far, far, far off in the distance. “If you can see past my loud outfit….that is the worlds tallest building!”

Some people remain undeterred, however. An Emirati mountaineer, Saeed Al Memari, has been given the green light to climb the side of Burj Khalifa and perform a base jump from the top on January 1. Al Memari had originally wanted to make the jump on New Year’s Eve, but the fireworks spectacular would, apparently, have made the stunt “too dangerous.” Once the fireworks are done, it should be no problem. Call me crazy, but this sounds… crazy.

Meanwhile, last week, a 32-year-old Commando in the Royal Navy, fueled more by charity than by adrenaline, climbed more than 3,000 feet of rope to raise money for the Children’s Happy Hospital Fund. Sergeant Rob Garthland began the Burj Khalifa Rope Climb Challenge at 7:00 a.m. and “completed 110 climbs of a 30 foot rope in HMS Raleigh’s gymnasium” by 4:00 p.m. He hopes to raise about 1,000 GBP for the charity. Help him reach his goal by donating today!

We wish all of our readers a safe, celebratory New Year! And we hope you’ll visit us for more design industry resources, updates, and information in 2013.

In 2013, Professional Liability insurance provider Victor O. Schinnerer will host independent subject-matter experts for four webinars, all geared toward Architects, Engineers, and other Design Professionals:

Computer-aj_aj_ashton_01.svgEmployment Liability Issues in a Recovering Economy

February 13, 2013, 1:00 – 2:00 pm eastern

Thomas L. McCally, Esq., Carr Maloney, P.C., Washington, DC

Design firms face various types of employment liability issues during the normal course of business. However, the downturn and subsequent recovery of the economy have brought these issues to the forefront of concerns for design firms. An attorney expert in litigating design firm employment practices claims will discuss the issues firms need to recognize as the economy improves and firms prepare to staff-up for the recovery.

Business Models and Financial Opportunities in a Recovering Economy

April 10, 2013, 1:00 – 2:00 pm eastern

Michael O’Brien, ASA, Rusk, O’Brien, Gido + Partners, Washington, DC

From funding sources to procurement procedures, the financial environment for professional services has significantly changed since the pre-recession economy. Both in the public and private sectors, the rules, risks, and routes to financial success are different. Professional services firms need to adjust their business plans to remain viable and to benefit from the opportunities in a recovering economy. Specializing in solving the business management and ownership challenges of consulting firms, our expert will share thoughts on the needs and responses of firms in the new service environment.

Technology Risks for Design Professionals

September 11, 2013, 1:00 – 2:00 pm eastern

David J. Shannon, Esq., Marshall, Dennehey, Warner, Coleman, Goggin, Philadelphia, PA

Technology risks associated with the business operations and professional services of design professionals is not new. However, the increased use of building information technologies and collaborative delivery methods, such as integrated project delivery, may increase the exposure of firms to traditional technology risks, as well as introduce new risks. Join our discussion with an attorney expert in technology risks to learn what exposures design firms need to be aware of and how to manage those exposures.

Insurance and Legal Questions for the Collaborative Design Team

October 9, 2013, 1:00 – 2:00 pm eastern

Rebecca H. Farnum, Esq., Thompson & Bowie, LLP, Portland, ME

Building information modeling and integrated project delivery provide a platform through which all members of the design and construction team collaborate. As with all new technologies and delivery methods, there are important questions the collaborating team should ask to identify and respond to legal and insurance issues in the open transfer of information in a contractual arrangement of shared risk and reward. Our expert will discuss what types of questions the team should ask before formally entering a collaborative agreement.

Visit our website to download the full PDF version of the 2013 Victor O. Schinnerer webinar schedule.

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.”

Continue reading “Expanding Employment Liability Risks for Design Firms”

a/e ProNet client Peter Walker, founder of PWP Landscape Architects, will receive this year’s Urban Land Institute (ULI) J.C. Nichols Prize for Visionaries in Urban Development. Walker will be honored at ULI’s annual fall meeting (October 16-19) in Denver.

Excerpt from the ULI Press Release:

Walker, whose career spans five decades, is widely recognized as one of the most accomplished landscape architectural designers of his time, forging the renaissance of landscape architecture as a discipline. The scope of his work is expansive, ranging from the design of small gardens to the planning of cities around the globe, with a particular emphasis on corporate headquarters, plazas, cultural gardens, academic campuses and urban regeneration projects. Exploring the relationships among art, culture and context, Walker challenges traditional concepts of landscape design.

“The thread that runs through all of my work is to make public space memorable, to make it the heart of the city,” Walker said. “You have to make people aware of the space so that it sticks in their memory, and it is important to the community. It’s not enough to just have open space. It has to have character and uniqueness.”

Walker was one of the chief designers of the National September 11 Memorial, “Reflecting Absence,” in New York City, which opened on September 12, 2011. His thoughtful approach to the memorial has been highly praised as reflecting both the collaborative aspiration of his practice and the public impact of his work. Other prominent projects include Jamison Square Park in Portland, Ore.; the Nasher Foundation Sculpture Garden in Dallas; Sony Center in Berlin; Millennium Park in Sydney; and Constitution Gardens on the National Mall in Washington, D.C.

We congratulate Peter Walker on this well-deserved honor!

About the ULI J.C. Nichols Prize for Visionaries in Urban Development

The ULI J.C. Nichols Prize is funded by an endowment from the family of J.C. Nichols to the ULI Foundation. A management committee including ULI representatives and members of the Nichols family directs the prize program. More information on the prize program is available at

About the Urban Land Institute

The Urban Land Institute ( is a global nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the institute has nearly 30,000 members representing all aspects of land use and development disciplines.

Item contributed by Leslie Pancoast of a/e ProNet Member firm IOA Insurance Services in Pleasanton, California.

Getting Paid For Design Services

The last few years have been challenging for many design firms. Adding fuel to this fire, many firms are having difficulty obtaining payment for their services. In a recent and ongoing SmartRisk Survey: 81% indicated trouble with getting paid. Successful account receivable programs do not have to be time consuming or daunting. By implementing some straightforward practices, a firm can implement an effective program that gets invoices paid on time along with maintaining a positive relationship with clients.

Establishing Financial Expectations. In an initial meeting with clients, explain in a clear and concise manner exactly what your services will be and the value you bring to the project, along with clearly stating your compensation terms. Your communication should be clear in establishing the financial expectations with the client. At this face-to-face meeting, you will obtain a sense of the client’s financial capability and ability to pay for your services. If you don’t get that warm and fuzzy financial feeling, this is the time to walk away.

Contract Agreement. The boundaries discussed at the initial meeting should be outlined in the contract agreement. Include a specific scope of services for the project, associated fees, expenses and cost of additional services. In basic terms, the agreement should explicitly state your client owes you money for services you will be rendering. The agreement should also specify the terms of payment, including any payment in advance of services. Continue reading “Getting Paid For Design Services”

This week, 46 a/e ProNet members from 27 member agencies are expected to attend our annual meeting in Chicago, Illinois. Over the course of two and half days, twelve top-tier Professional Liability insurance companies will present to our membership. Each company will take this opportunity to announce policy form changes, new endorsements, and pricing expectations for the coming year; as well, they will alert us to industry trends surrounding claims and risk management.

Because a/e ProNet brokers are independent, that-is, not tied to any single insurance company, the insurance companies sending representatives to this event know that they are in competition for our business. It is in their best interest to make their programs as comprehensive and beneficial  to our clients as possible. The companies attending this event include: RLITravelersVictor O. SchinnererLibertyBeazleyCatlinHCCHanover, Navigators, Insight, All Risks, and AXIS.

Our Thursday night reception for members and insurance company representatives will be held at a new venue this year: The Grand Army of the Republic (GAR) Rotunda at the Chicago Cultural Center.

Our clients are architects and engineers, and we appreciate what they do today, as well as what they have created in the past. We chose the Chicago Cultural Center, opened in 1897, because it is “one of the city’s most popular attractions and is considered one of the most comprehensive arts showcases in the United States.” In other words, it’s beautiful! A Chicago landmark, located in the Loop, across Michigan Avenue from Millennium Park, the GAR Memorial consists of a large hall and rotunda in the north wing of the building. The hall is “faced with deep green Vermont marble, broken by a series of arches for windows and mahogany doors. The rotunda features 30-foot walls of Knoxville pink marble, mosaic floor, and a fine, stained-glass dome in Renaissance pattern by the firm of Healy and Millet.”

If you have questions about this meeting, or a question about a/e ProNet, don’t hesitate to contact us. You can also find your local a/e ProNet broker through our website.

With more project owners demanding the use of Building Information Modeling (BIM), project delivery is necessarily carried out through greater contributions of design input by the general contractor and the major trade subcontractors. The design professionals are no longer the sole authors of the project design. This collaborative project delivery method has been called integrated project delivery (IPD). The contribution of design input from each of the various project players using IPD is a significant break from the traditional division of responsibility recognized in the standard design-bid-build project delivery method. Players who never participated in the project design now face potential risk of professional liability. Additionally, the new, cutting-edge technologies being used for BIM expand the types of risks born by the design professional if there are errors and omissions within the computer modeling system or the improper management of the computerized data.

What is BIM?

BIM involves computerized design software tools that help create a model that reflects all of the building components’ geometric and functional qualities. The general contractor and trade subcontractors provide product-specific information for building components and that data is inputted into the model, including performance specifications, connection details and cost data. However, the model is more than a mere representation of the design in a three-dimensional computer graphic. Embedded within the design programs are rules that define each of the components’ relation to the other components. Continue reading “Integrated Project Delivery: Changing the Insurance Landscape”

Competition among design professionals can be fierce, so it is critical to be as prepared as possible when trying to win new projects, especially those that are put out for bid.  Just as you have project quality control procedures to review a design, you also should have a similar process for responding to an RFP (Request for Proposal) to assess the appropriateness of the project for your firm, to minimize risk and to insure profitability.

When first considering whether to bid on a project, ask these questions:

  • Does our firm have experience with the project type?
  • Is our staff capable of handling a project of this size and scope?
  • Do we have confidence in our design team, including sub-consultants?
  • Can we turn in a successful project and make a profit?

Once you decide to respond to the RFP, you will take many steps to ensure your firm has a good chance at being awarded the project. You will choose a project manager and team that have the most experience with the project type. You’ll take great care in selecting your sub-consultants. You’ll follow your customary quality control procedures and review every aspect of the design phase; the costs of construction, the construction schedule and most importantly, your fees.

So, what could possibly go wrong when responding to an RFP? The answer may lie within the RFP itself.

Project Owners and Project Expectations

When you assemble your project team, you need to call upon the staff members who are best suited to understand the project and the terms spelled out in the RFP.  Your team should be asking the following questions.  Who is the project owner? Is it a government entity? A school district? Is the project publicly funded? Is the project owner a developer? If it is an LLC, who are the parties that comprise it?  Understanding who the project owner is as well as the expectations set forth in the RFP is as important as delivering the winning bid. Continue reading “Responding to an RFP: Risk Management Tools to Guide the Bidding Process”