Hall & Company is
an AIA Continuing
RISK MANAGEMENT LIBRARY
This event, presented by Bruce Demeter, Vice President of One Beacon Professional Insurance discussed the following learning objectives:
1. To provide participants with information regarding ethical and Code of Conduct requirements that are arising in public works agreements and laws; project delivery methods such as P3; and project design modeling such as BIM.
2. To provide the participants with information on how contractual ethic and Code of Conduct requirements may affect the professional standard of care and professional liability insurance coverage.
3. To provide participants with the knowledge to address and minimize the risk exposure of contractual ethics and Codes of Contact may represent.
4. To provide participants with the knowledge necessary to develop and maintain a contractually required Code of Conduct and ethics.
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This topic was presented on Tuesday, October, 2012 by Dan Weedin of Toro Consulting, Inc.
At the end of this presentation, participants will understand the following learning objectives:
1) Gain an understanding of the dangers that cyber liability pose to architects and engineering firms;
2) To identify the most common cyber perils;
3) To create a simple, painless approach to managing the risk ; and
4) To develop a communications plan for all key stakeholders
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This event presented on Tuesday, August 21, 2012 by David Eckberg and Kara Masters, Partners at Skellenger Bender Attorneys at Law discussed the following effective strategies for getting paid including:
1) Use of specific contract clauses (such as advance payment, incentives for fast pay, and penalties for slow pay) and understanding and avoiding pay when (if) paid clauses; and
2) Understanding and capitalizing on public contract protections including fast pay regulations and Miller Act payment bonds; and
3) Understanding and capitalizing on lien laws which are form and time sensitive and differ from state to state; and
4) Proactively avoiding or minimizing professional negligence claims that often follow a demand for payment.
David Eckberg focuses his practice in the areas of corporate affairs and commercial transactions, environmental law, employment law, construction law, real estate law, and general counseling and representation of design and construction firms doing business in the environmental industry. He also represents owners and operators on transactional matters, environmental disputes, and compliance matters. His practice also includes advising health care professionals on business law matters.
Kara Masters practices civil litigation and appeals in the areas of design professional defense, construction law, insurance coverage and defense, environmental law, employment law, and general civil litigation.
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This webinar, presented by John Broghammer, Esquire of Greve, Clifford, Wengel & Paras, LLP discusses the following topics:
• Understand the importance of risk management and how it effects overall A/E practice management;
• Understand the use of insurance in litigation;
• Understand how documentation can be a useful weapon;
• Understand how your risk management practices can impact service to clients.
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This online presentation regarding Ethics for Design Professionals was provided by Mark Schultz, Esquire of Henderson, Franklin, Starnes & Holt, PA. This webinar will discuss the following topics:
• The effect of ethics on your practice and license
• The source of ethics governing your practice
• The effect of ethics on lawsuits and insurance
• Locating sources of information on ethics and ethical questions
Click on this link to access the recording of this webinar.
At the end of this presentation, you as an attendee should understand:
• The consequences of missing, lost, or incomplete project documentation. What a limitations of liability clause is and how it can be an effective risk management tool;
• Evaluating the options and interplay between paper and electronic records.
• Core Principles for documentation and document retention.
• Specific tools and resources to consistently address and succeed with recurring documentation issues
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Presented by Bob Rosain, PE, PMP of Bob Rosain & Associates, LLC , this presentation will share what firms can do to minimize business risks through effective project management practices. Specifically this webinar will discuss:
1. The essential elements of a solid Project Management Plan and why, “…planning a project will not guarantee success, but failure to plan will guarantee failure.”
2. Why your project’s scope, schedule and budget are considered a “three-legged stool” and how to manage the big risks associated with project changes.
3. Why effective communications are absolutely essential to project success, why poor communications have been described as the biggest contributor to project problems and what every project manager needs to know about communicating with their clients.
4. Ensuring quality in every aspect of project delivery as a fundamental risk management strategy. The quality of the project and project deliverables will be remembered much longer than the project’s schedule, budget or project manager!
5. Why project risks need to be identified, understood and managed so they don’t become business risks for your firm.
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Presented by our own President Mike Hall of Hall & Company, this presentation will highlight the most challenging insurance claims and our approach to evaluating, negotiating, and managing those claims for our clients. Specifically this webinar will provide:
1. An overview of some of the largets professional liability insurance claims we have seen the past 20+ years
2. A review on how these claims could have been avoided
3. A review on how these claims could have been better insured
And finally, a discussion on how these claims could have been better managed.
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Presented by David Eckberg of Skellenger Bender Attorneys at Law, at the end of this presentation, you as an attendee should understand:
• How the law treats economic losses (such as construction delays and lost profits) that may be caused by a design professional's errors or omissions; Why contracts can impact your indemnity obligations
• What a limitations of liability clause is and how it can be an effective risk management tool;
• With the understandings in 1) and 2) above, you will then learn the importance of different insurance coverages; and
• How to properly draft and negotiate contract clauses to account for economic loss and enhance the enforceability of limitation of liability clauses.
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This event, presented by John Broghammer, Esquire of Greve, Clifford, Wengel & Paras, LLP will discuss the following topics:
• Understand the importance of the overall A/E contract;
• Understand why contracts can impact your indemnity obligations;
• Understand how your contract can affect the standard of care and increase risk;
• Understand how your scope of work and mundane contract clauses can impact the A/E bottom line.
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This event, presented by Mark Schultz, Esquire of Henderson, Franklin, Starnes & Holt, P.A. will discuss the following topics:
• The legal expectations for design professionals if advertising services as LEED credentialed
• Negligence standards to protect design professionals and how to maintain those standards in contracts
• Why guaranteeing a LEED certification for a building should be avoided
• Obtaining a client’s informed consent when using new green products that may not have a proven performance record
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This event, presented by Dr. Conrad W. Felice, Ph.D., P.E., P.Eng., D. GE. of C. W. Felice LLC will discuss the following:
• Review of underground engineering and construction
• Understanding risk in underground projects
• Practices for managing risk and avoiding and mitigating claims
• Future and direction of the use of underground space
Presented by David Ericksen, President of Severson & Werson, this presentation will highlight the most challenging contract clauses and our approach to evaluating, negotiating, and managing those clauses for successful projects. Specifically, we will apply our time-tested negotiation and management model to some of the most challenging clauses such as indemnity, the standard of care, code compliance, document ownership, and others. Click here to view recording
This event, presented by Terence J. Scanlan of Skellenger Bender Attorneys at Law. Terry will discuss the following topics:
• Duties imposed by local and federal law on Design Professionals
• Case history examples of duties assumed by conduct during design, construction administration and observation
• Design Professional immunity from claims by injured workers
• Contracting issues regarding assumption of duty
• And more…
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This event was presented by Michael Corso, Esquire of Henderson, Franklin, Starnes & Holt, P.A. and discussed the following topics:
Statutes of Limitations and of Repose
Tort and Contract Law
Determination of Negligence and Liability
Contract and Strategic Considerations
Project documents and Administration
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This event was presented by John M. Lowe of Lowe Consulting, LLC and discussed the following topics:
The Philosophy of Contracting
Contracting for Professionals Services
Project Delivery Methods
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This article gives a general overview of the Certificate of Merit Law and how it is applied. Below is a quote from this article:
Many design professionals, and some of the attorneys who defend them, believe the Certificate of Merit law has often been circumvented or ignored and ask what rights they have if plaintiff's counsel fails to comply.
Before the attorney can sign the Certificate of Merit, s/he must review the facts of the case with one design professional, licensed and practicing the same discipline as the defendant, and receive an opinion that the defendant was negligent in the performance of professional services. When that consultant's opinion has been received, the attorney may declare, under penalty of perjury, that s/he has concluded there is reasonable and meritorious cause to file a lawsuit. Curiously, the statute does not require the consultant's opinion to be in writing.
The Certificate of Merit statute provides the identity of the consultant is privileged information which is protected from disclosure. There is, however, one exception. The exception applies if the case goes to trial and the design professional wins. Upon winning, s/he may move the court to verify that plaintiff's attorney complied with the law about the Certificate of Merit. The trial Judge may then require the disclosure of the name, address
and telephone number of the design professional who was consulted. The disclosure, however, is to the Judge only. The attorney for the defendant is not given the information.
The Collections-Claim Connection: Getting Paid without Getting Sued. Below is a quote from this article:
Experience shows that many firms fall behind in their collection efforts and accrue large, overdue receivables because they find discussions of such issues with clients to be awkward, uncomfortable, and even “unprofessional”. In reality, it should be seen as unprofessional to not address the issues. There are professional ways to pursue such issues without their becoming a point of conflict with a client. If they do become a point of conflict, it is better to know sooner rather than later.
A good collection procedure will typically follow a rational path of escalation. Such a Procedure may include some or all of the following:
1. Even if a payment is not technically “due”, consider sending a reminder notice. For example, if an invoice has a thirty (30)-day payment period, it may go to the bottom of the pile. A reminder fifteen (15) days before the due date will often move the invoice back to the top of the pile.
2. If a payment is not received by the due date, a prompt written reminder should be sent. It should be succinct, courteous, and professional.
3. If payment is not received within a short time of the reminder letter (e.g. 10-15 days), it is time for a personal contact. It may be in person or by telephone. Avoid asking questions such as: “Is there a problem?” Rather, ask: “Is there a reason we did not receive payment on time?” this is less likely to suggest vulnerability. Confirm the conversation, any explanation, and the commitment to pay in writing. The explanation and the commitment may often be useful in a later collection effort and to defeat any differing excuses offered later. Even if no explanation is offered and no commitment made, the conversation should be documented for later use in establishing notice and the lack of criticism.
4. No later than thirty (30) days after a payment becomes overdue, all strategic options and requirements should be considered. This would include contractual options such as suspension of services, enforcement of guaranties, and notifications to owners and lenders. It would be also include statutory remedies, such as lien notices and stop notices. Again, none of these measures is unprofessional, but are simply tools to be used to keep a project on track.
Despite the best drafted agreements, if the very existence of the document is called into question, such an agreement may ultimately prove useless. Specifically, in many instances an owner or contractor with whom a design professional claims it had a valid, binding contract will claim that no such agreement ever existed and as such, the terms and conditions of the purported agreement cannot be enforced against them.
From a claim standpoint, the absolute worst thing a design professional can do is to dispose of project documents without having some form of a retention policy in place.
Find out which documents (and why) should a design professional retain.
Creating a Culture of Professional Liability Issues Awareness
Code of Ethics
Having a written Code of Ethics has long been considered to be a desirable document to have. It is intended to explain the expectations of a firm’s management regarding how all of its employees, including management, are to conduct business. It addresses things such as Conflict of Interest, Personal Integrity, Use of Company Resources, and Employee Performance. It lets all employees know what is expected of them and until recently, represented minimal or no potential business risk. However, in 2007, that changed when Federal Acquisition Regulations FAR 52-203-13 – Contractor Code of Business Ethics and Conduct required that firms having certain professional services contracts with the government must have a Code of Ethics.
For the most part, a firm’s Code of Ethics is not problematical, except for the section that addresses standards of individual performance when executing a design. The problem is that this section of the Code of Ethics can be aspirational in nature, setting a very high standard toward which employees should diligently attempt to reach. The employee performance standard can be stated in a way that it exceeds the performance requirements specified in the contract Standard of Care provision. When the Code of Ethics is provided to the government, or other clients, the client may attempt to assert the contractual right to hold the consultant to those standards. If, in the opinion of the client, the Code of Ethics standard is not met, the client may assert that negligence has occurred. In this case, the protection afforded by a carefully crafted Standard of Care is lost and the professional liability policy will likely not cover losses resulting from this situation.
As with Statements of Qualifications, Codes of Ethics should not overstate performance standards that exceed those of the contract Standard of Care. Be sure to review your existing Code of Ethics before providing it to your client or prospective client.
Quite often we are asked to defend an action in which a claim is made against a design professional that damages occurred as a result of improper design and/or construction phase services performed by the design professional. More specifically, it is often the case that damages occur as a result of the failure of a product or element of the construction which may have been designed or specified by the architect or engineer, or the subject of inspections or observations by the design professional during the project.
This article focuses on a case in CA (UDC v. CH2M Hill) that determined that a design professional had to provide a defense to the contractor absent the determination of negligence. Also included are examples of recommended indemnity language.
Underwriters and insurers in any niche market, such as the professional liability market for architects and engineers ("A/E"), must understand the issues and the capital which drive the market. Learn what are underwriters use to adequately investigate and underwrite these risk.
Some certificate holders are refusing to accept the September 2009 ACORD 25 form because it no longer includes a notice of cancellation, but rather refers them to the policy. This article explains why you should not or can not comply with this demand.
In 2010 Hall & Company wrote 315 architectural firms that employed one person. These firms were located in 42 states and were placed with 10 different insurance companies. This article provides sample statistics on what these firms paid for their Professional Liability Insurance Coverage.
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Hall & Company is an insurance brokerage firm that works exclusively to serve the needs of the A/E design community. We have provided insurance to architects, engineers, environmental consultants and land surveyors for more than 20 years. Licensed in all 50 states, we serve more than 3,600 design professionals nationwide.
Founded by a former engineer, Hall & Company is different than the average insurance brokerage. Our task may be selling insurance, but our mission is to understand your practice so we can fully determine its needs and present the best and most cost-effective insurance options.
Would you ever consider starting a business venture with just any design professional that happens to come your way and take them on as a business partner? Accordingly, why would you begin a working relationship with a consultant you know nothing about?
As a design professional you scrutinize your clients to manage your risk by the use of an internal client selection process, and you should have an equally thorough selection process for consultants prior to the start of any project.
The California Court of Appeal on December 13, 2012 issued an opinion which is harmful to design professionals performing services in this state, broadening their exposure to claims brought by third party purchasers of properties which they design.
Unless the case, Beacon Residential Community Association v. Skidmore, Owings & Merrill, LLP, et al. (“Beacon”), is overturned by the California Supreme Court, design professionals in California are wise to assume that regardless of their attempts to circumscribe their scope of duty by contract, they will be held to owe a duty of care to subsequent purchasers of the properties they design, particularly if those properties are residential. This, in turn, places additional importance on design professionals’ other contractual protections, such as the rights of indemnification and defense.
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Patent and Latent Defects: How Long May a Designer be Exposed to a Lawsuit Because of Defective Design? This article focuses on the differences between a "patent" defect and a "latent" defect and the differences in exposure to the design professional with specific reference to the length of time with which an injured party can seek restitution.
Design professionals often find themselves involved in costly and sometimes lengthy litigation. During the course of that litigation, options routinely available to the design professional include, if appropriate, requesting a voluntary discontinuance of all claims asserted against the design professional or, if such a request is rejected, proceeding with a motion to dismiss the claims. Read more about "A Viable Option" as a remedy to these issues.
This article focuses on the contractors ability to sue a design professional for purely economic damages even if no contractual relationship exists but only to the degree of responsibility the DP has agreed to undertake.
This article focuses on a NJ statute that serves to limit the exposure of engineers from lawsuits alleging bodily injury to a construction worker. However, the statute does not extend to architects. Why?
As far as an AEC business goes, risks can really be broken into two categories: General business risks and project risks. General business risks are things like the general ups and downs of the markets we serve, our competition, personnel safety and maybe business continuity during a disaster.
Even brief contracts provided by the AIA, AGC and others, as well as the related construction industry literature, reveals a crowded field of terms describing the "completing" concepts for project delivery such as: Design-Bid-Build; Design-Build; Integrated Project Delivery; Multiple Prime; Fast Track; Construction Manager at Risk; Guaranteed Maximum Price; Cost Plus Fee; and more...
The Problem With Assuming Too Much -
This edition of the A&E Reporter will detail the challenges for professionals who take on a project when the initial team is no longer involved. Learn about the issues a new firm faces when it finishes what someone else stated...
Last year, the City of Seattle adopted Ordinance No. 123698, mandating that certain employers provide a certain amount of paid “sick” and “safe” leave for their employees. Because of the complex nature of this ordinance and its interplay with other employment laws, it is anticipated that many firms will continue
to face compliance issues and questions as new and modified employment policies are unfolded in response to the Seattle mandate.
Getting paid without getting sued can be a challenge, indeed, an art, for design and construction professionals, particularly in a recessionary era. Now there are new tools for design professionals and their legal counsel to employ in this art. Comprehensive new laws go into effect in California concerning liens.
Funding for riparian habitat restoration projects has grown, and large woody debris is being used with increasing frequency to protect natural resources and infrastructure alike. The rising
interest in these dynamic in-river structures that mimic nature has spawned questions about liability that go beyond some of the issues addressed in our earlier white paper.
In this issue:
•Texas "Loser Pays" Legislation Brings Significant Changes to Texas Civil Practice by Amanda Y. Sirk, Esq.
•Pennsylvania's New 'Fair Share Act' Provides a More Equitable Distribution of Damages among Desogn PRofessional Defendants by Megan E. Lehman, Esq.
•Design Professionals' Gains in New Jersey's Economic Loss Doctrine by Eric Cohen, Esq.
•Nevada Supreme Court Strictly Enforces Certificate of Merit Statutes by Sa'adiyah K. Masoud, Esq.
•New Jersey Appellate Court Limits Liability Based upon Reasonable Contractual Provision by Jacqueline J. Rompre, Esq.
Green and Sustainable Design: Part 2: Contractual and Risk Management Recommendations for Design Professionals to Manage Risk and Maximize the Availability of Professional Liability Insurance.
This article outlines the effects on ADA litigation as the result of the Munson case in CA. Below is a quote from this article:
In light of the holding in Lonberg v. Sanborn Theaters, Inc. (9th Cir. 2001) 259 F.3d 1029, the class of ADA violators can be owners, lessors, lessees or operators of a public accommodation; however, design professionals cannot be sued in the Ninth Circuit (which
circuit includes the State of California) for an ADA violation. Lonberg determined that, while the ADA applies to owners and lessors (and certain others), its reach does not extend to design
professionals. Interestingly, some Federal appellate courts have come to a different conclusion on ADA suits; however, to date, design professionals are protected from Federal ADA lawsuits
filed in California. This fortunate result, though, does not prevent owners or lessors, who are sued under the ADA and/or the Unruh Act, from seeking implied (or possibly express) indemnity
from a design professional who allegedly committed professional malpractice, which resulted in the ADA violation, or a personal injury suit alleging a Munson cause of action.
After Munson, it is highly likely, as borne out by a recent trend that California state court actions founded upon the Unruh Act, and based upon ADA violations, will commonly be brought against owners or lessors for damages. It has and will continue to produce indemnity
cross-suits by such defendant owners or lessors against design professionals for alleged malpractice in connection with the ADA violation allegedly causing the loss.
Insurance coverage questions arise from these cross-suits; For example, questions arise from: (a) the nature of any “ADA violation” exclusions found in the Design Professional’s errors and omissions policy; (b) the ability of the indemnitee cross-complainant to recover from the design professional sums in excess of the actual damages suffered by the plaintiff (which the Unruh Act appears to allow); and (c) possible questions over an attorneys’ fees recovery by the cross-complainant against the design professional.