Minimize Risk - Maximize Performance
July 2014

 Mailing List Link:

Join Our Mailing List

Link to Forward Newsletter:

Forward Newsletter  

View Past Newsletters:

Archive Newsletters


Your input is important! Please take 2 minutes and participate in the following radio button survey.
Results will be provided in future newsletters, articles and industry training sessions. 

2014 A/E Industry
& Risk Survey

Survey Link 

Current Survey Responses

Project Types:

Commercial/Office - 17%
Apartments - 16%
Schools/Colleges - 15%
Mixed Use/Condo - 15%

Increase 10% - 21%
Increase 20% - 16%
Zero Change - 16%
Decrease 10% - 16%

Claim in the Last 3 Years
Yes - 68%

Cause of Claim(s)
Technical Error, Omission - 23%
Poor Communication - 18%
Poor client due diligence - 12%

Additional Comments for Causes of Claims
Aggressive schedules
Lack of PM Strength
Contractor Quality Control
HOA claims at 10 year limit


Survey Reports 

 *A/E Law Firm Survey*

 Detailed survey of 20 A/E Law Firms across the United States providing regional and national perspectives on legal developments, claims and root causes driven by economic conditions with loss prevention recommendations and other insights from these legal experts.  

A/E Law Firm Survey Report Link

*A/E Survey Report*
Insightful survey report of A/E firms and how economic conditions are impacting business opportunities and affecting business decisions today.  

A/E Firms Survey Report Link

*A/E Insurance Carriers
Survey Report"

Survey of 17 insurance carriers specializing in A/E Professional Liability (PL) insurance identifies current economic risk factors
, services offerings, claim trends and recommendations for reducing liability exposures.  

PL Insurance Carrier Report

Quick Links Section

Insurance, Risk or Professional Liability (PL) Question?   

Ask SmartRisk


Primary Causes of A/E Claims


Design Professionals (DP) can be found liable for claims and damages in various situations. The claims and types of damages depends on who files the claim against the design firm. For example, an owner could file a claim based on a breach of contract, or a contractor alleging negligence, errors, or omission of design causing out of sequence work, causing additional construction costs.


The following are four (4) prime causes for liability claims against design firms.


1. Contracts: Contract claims against design firms typically include – negligence and failure to comply with the standard of care, compliance with the project schedule, and breach of contract requirements. In a negligence-based claim, it must be shown that the design firm failed to perform in accordance with the standard of professional care usually exercised by other professionals in similar circumstances. Design firms have also increased their liability and standard of care by accepting terms such as “best” and “first in class” contract terms.


2. Warranty: Design firms find themselves in a difficult position when through the contract terms they specify specific results will be obtained resulting as a guarantee of their services, and for the project. Examples: particular concerns relate to green, sustainable projects where firms are guaranteeing certain energy, water savings, reduced lifecycle costs, and increased building performance.


3. Design Liability: Design firms should be judged based on the standard of care exercised by other professionals for services and project type in like situations. The more complex and unusual a design, some latitude should be allowed based on the unique design features. However, design firms have been found liable because designs have caused increased maintenance and repair costs for owners. Courts have also held design firms liable for damages incurred as a result of approving other firms’ drawings that caused damages to the owner.


4. Site Inspection: When a design firms assumes responsibility for performing site inspections, they are bound in the performance of those duties. The inspection requirement is a obligation for the firm to provide the owner with assurances that the work is being completed in conformance with plans and specifications. Owners have viewed this service as a warranty of the contractors work. Failure of the design firm to comply with inspection contract terms can result in liability. Based on the firm breaching this obligation, and the “proximate cause” of the failure of the firm to discover the defect, the firm is then held liable for the cost in correcting the defect.

SmartRisk has successfully helped
firms improve their practice and risk management efforts. If you have any questions, or are interested in obtaining more information, please contact us. 

You are welcome to forward this newsletter to others who may be interested.

Thank you.

Feedback or Comment?  Comment Link


SmartRisk is a leading risk and practice management consultancy for design and building professionals. Through firm specific risk assessments, training and consulting, services focus on improving overall performance, profitability and reducing insurance costs through tailored risk management solutions.

If you have any questions about our services, or would like dicusss how we could assist your efforts, please contact us.

Thank you,

Timothy J. Corbett, BSRM, MSM, LEED GA
Founder & President

Copyright and Information Only. This newsletter is for information purposes only and should not be construed nor relied upon as guidance, regulatory or legal advice. Readers should consult with appropriate counsel regarding their specific situations and circumstances. SmartRisk shall not be liable for any errors in content, or for any actions taken in reliance thereon.

If you would like to be removed from the SmartRisk Report mailing list, please use the link below.   

T: 626-665-8150