Architectural and engineering firms have a unique set of liability coverage challenges. After spending six years as a mechanical engineer in the oil and gas industry, I’ve seen my share of gaps. And I’m excited to bring that insight to our clients at The Miller Group.
When it comes to insurance, I suspect architectural and engineering firm leaders are like other business leaders: They’d really rather set it and forget it. But just one tiny gap in coverage can cost millions. So, it’s well worth the investment to have regular conversations with your broker. Here are some events that should trigger a review.
Are you having your carriers review new contracts? You can easily schedule this into your routine contract review process. It typically takes just a couple of days, and the service is offered free of charge by most carriers. As you know, every contract is different, so it’s worth a few days in the schedule.
Typical professional liability insurance for designers doesn’t cover the building stage of the process. If design-build is new to you, be sure to notify your broker so you’re covered from all angles.
I witnessed a design-build project where access to a pump was blocked by a cable tray support that had been re-routed after the mechanical design package was completed. With communication, of course, the pump could have been moved before the concrete was poured. But the change was missed due to a lack of interdisciplinary re-review between project packages. The design-build firm was on the hook for the re-work and damages. Your broker can help spot this kind of vulnerability and help make both your processes and your insurance coverage guard against it.
Also, dig into your policy to see if you’re covered for mistakes, changes in the field and other adjustments that happen after design. And check to see if your subcontractors’ certs are reviewed, too. That’s another service offered by most reputable brokers.
Custom technology or systems
Another potential gap is coverage for any internally developed software you may use in your design or design-build project. For example, if a mistake in a program you built internally for making design calculations caused a building error, would you be covered? Internally developed software may not be included in standard professional liability policies.
Cyber liability changes
Most professional firms have cyber insurance, but it pays to check that you have enough and the right kind. Are your limits current, and are you covered for all the new ways you’re using technology? Think drones and file transfers, as well as communication with owners and subcontractors. If you’re hacked, you open the door to these partners, too.
Regulations and laws vary from state to state and country to country. If you’re doing business in a new location, you really need to check your coverage with your broker. You can find yourself vulnerable when your insurance is adequate for the locations you typically work in, but they are nowhere near correct for a different state, or especially a different country.
Engineers and architects are famous for building in redundant processes to have accurate work. But errors still happen. Accurate insurance coverage is just as important.
By Brad Miller, Commercial Risk Advisor