Tag: Professional Liability

Blog Love: ConstructionRisk.com on YouTube

By Lynda

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!

ProNet Practice Notes: Is BIM right for you and your project?

By Lynda

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!

Engineering Inc. – 2013 Professional Liability Insurance Survey of Carriers

By Lynda

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”

The NEW Schinnerer Risk Management Blog

By Lynda

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.

schinnerer_riskmanagement_newblog

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!

An Unfair Duty to Defend

By Lynda

pnn_unfairdutytodefendNo engineering project is without risk. Somewhere between the goal of designing the best bridge, building or water treatment facility and running a profitable business lurks the ever-present possibility of litigation. A legitimate disagreement can occur, a company can make a mistake, or a firm or government entity—or a member of the public—can file a lawsuit that forces the firm to defend itself and its work. “A lot of risks exist and they’re not necessarily related to the quality of the work performed,” says John Moossazadeh, a senior vice president at Kleinfelder in San Diego.

Engineering firms often take jobs that knowingly expose the firm to legal risk. But how much risk is too much?

That’s a question that more and more engineering and design firms are asking when confronted with contracts that contain controversial “Duty to Defend” language.

A contractual Duty to Defend provides that the engineering firm will pay for attorney’s fees and costs incurred in a client’s defense of a claim. Depending on the con-tract language and the governing jurisdiction, this duty may be immediate from the time the claim is made, and may exist regardless of whether the engineer is found to be negligent. Although basic indemnification and defense clauses are common, and they typically assign risk to the negligent party, a growing number of developers and agencies request—and, in some cases, demand—that the consultant or firm in charge of the project defend any suit or other legal action brought against the developer or owner, and sometimes even irrespective of whether the claim is related to the engineer’s services.

Duty to Defend provisions are therefore criticized because a consultant or engineer who signs such an agreement could be legally required to bear the cost of defending against any project-related claim, even when the claim has nothing to do with the services performed by the firm, and there’s zero evidence of negligence. “It forces engineers to take responsibility for far more than the work they’re being paid to do and what their insurance covers,” explains P. Douglas Folk, principal at Folk & Associates in Phoenix. Continue reading “An Unfair Duty to Defend”

Architect & Engineer Insurance FAQ: Breach of Contract

By Lynda

contract

Why should I strike “breach of contract” from the indemnity provision in my agreement?

For one thing, it is redundant as there is already a remedy under the law should you breach your contract. Please note the excerpt in the next question from our Practice Notes Vol. 4 NO. 2, Indemnification: How to Identify Unacceptable Risks and Get Them Out of Your Agreements.

What is the significance of the statement in an agreement: “breach of any term or condition of this Agreement”?

Negligence may be difficult to prove, but breach of contract is not. To establish a breach, all an owner need do is prove that 1) you owed a duty to perform under your agreement, 2)you breached that duty, and 3) damages were sustained as a result. This is your client’s fall back position in the event negligence turns out to be impossible to establish. It is also your invitation to the owner to sue you at your expense. There is great leverage in this, and it flows in a single direction-from you to your client. Your client sues you for breach of contract, and you pay the associated attorneys’ fees and costs. Arguably, this is inconsistent with public policy. Public policy generally demands mutuality as a matter of equity where there is an agreement by one party to pay the attorney’s fees of another regardless of the outcome of a dispute between the two. Attorney’s fees are the only issue here, for if you are found to have breached your contract, there is a remedy for that in the law. As far as you are concerned, it is neither necessary, nor is it appropriate for you to add your indemnity to that remedy. Absent negligence your indemnification for breach of contact may be uninsurable; absent mutuality, it is unfair. Delete this language if you can. If you encounter sustained resistance, you might invoke the public policy argument and propose, as an alternative, to substitute language elsewhere in your agreement calling for the non-prevailing party to any dispute to compensate the prevailing party for costs of defense. There is leverage in this for you, but there is also some risk. Seek the advice of counsel before you pursue this strategy.

Excerpted from the FAQ page on the a/e ProNet website, one of many risk management resources for Architects & Engineers. Have any questions? Contact your local a/e ProNet broker or contact us directly today.

Why should Architects & Engineers use a specialist Insurance Broker?

By Lynda

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?”

a/e ProNet Holds Annual Meeting in Chicago

By Lynda

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.