Architects and engineers are highly specialized and technical professionals. The decisions they make on form and function build and shape the world around us.
Their design decisions permeate a project; affecting cost, efficiency and even public safety. With such capability comes great responsibility…and risk. Expertise and experience are essential with so much being at stake.
MJ Kelly’s team of underwriters have compiled a “Top Ten” list of important risk factors that your professional services clients should consider:
- Clearly define the scope of services they are providing to their client, identifying both the services that are included and the services that are not included.
- Objectively document how they came up with a set of recommendations to their clients so they can demonstrate that the decisions were based on the engineering judgment from available information at the time the recommendation was made.
- There are often hazardous conditions on every construction site. It is important that while performing professional services on-site, individuals inquire about any potential hazards and are diligent and observant while performing their services of activities and potential hazards that could cause harm to themselves, harm to others, or damage to other properties.
- Proper insurance coverage is an important risk management tool. It is important that all professional service firms be aware of the risk involved from their services and to verify that their professional liability coverage for their services is adequate.
- Written contracts are essential when performing professional services. A well-written contract can help avoid claims by clearly outlining the responsibilities.
- Defense costs may be higher than indemnity therefore, it is important to review your coverage limits to ensure potential defense costs are factored in.
- A contract should include the owner’s requirements for the project such as design objectives, constraints, performance requirements, and any budgetary limitations.
- Inspection reports for pre-purchase purposes are not as low risk as they may seem. These reports often have a low fee and if not sufficiently detailed, can lead to serious liability.
- A design professional should always make sure that the other parties involved in a project have insurance before accepting a job.
- A firm must document that it is providing opinions only within its expertise and state that the services are only to be relied on by the client.