In todays litigious society, mistakes can lead to lawsuits. Client tolerance for errors has gone down at the same time as the severity of claims has risen. When projects fail, the owners will often blame the problem on deficient design documents. Therefore, having adequate architects and engineers professional liability is important to the financial health of your firm. It can protect you from the cost of a lawsuit arising from an alleged mistake that has caused your client to suffer a financial loss.
Emerging Risks for Design Professionals
- Accepting projects outside your firms area of expertise
- Data theft of intellectual property
- Subcontractor and consultant exposure (vicarious risk)
- Sustainable projects exposure (these require specialized expertise)
- Poorly worded contracts
Mitigating the Risks
A program to manage risk should also be put in place to protect your firms profitability. Some important areas to consider include the following:
- Client selection: get to know your clients and their financial situations well. Financially-stressed clients tend to bring claims.
- Draft your contracts and subcontracts carefully; seek client understanding and approval.
- Establish genuine two-way communication with your clients.
- Establish quality control standards that include review and checking.
Your insurance specialist can help customize architects and engineers professional liability to suit the unique needs of your firm.