Risk Performance Strategies
May 2019

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Prime Causes of Liability Claims

Architect and Engineers (A/E) can be found liable for damages in various situations, depending on who claims damage, and the basis of the claim. For example, where an owner has a direct contract with the A/E firm, the owner could bring a claim based on the contract or a claim based in a tort action. Such action, based in negligence, is a claim for malpractice against the design firm. Below are four prime causes of liability claims against A/E firms.



1. Contract Claims - Typical contract based claims against an A/E firm include, failure to complete projects on time, and work improperly performed under the design firms direction. In the absence of any express language specifying the standard for the design firm’s performance in a breach of contract claim, some courts have applied a negligence standard.


In a negligence standard claim, it must be shown that the design firm failed to perform in accordance with the standard of professional care usually exercised by such professionals in the industry.

2. Warranty Claims - The design firm enters into a contract with liability concerns if the firm fails to produce specific results as guaranteed in the contract, even if the firm conforms to the industry standard of performance. This could be related to project or product performance, performance of others including the owner, their consultants and contractor.


A/E firms have been found liable for damages, not because of design flaws, but because of the projects performance including increased maintenance and repair costs.

3. Design Liability – Design firm’s services should be compared to the standard of ordinary and reasonable skill usually exercised by other licensed professional unless the firm agrees to heightened standard in the contract.


The more unique, complex and unusual a design, the more latitude a design firm should be allowed and stipulated in the agreement. Design liability may apply for items that are beyond the design of a lead design firm.


Courts have held that a lead design firm will be liable to the owner for any damages incurred as a result of the firm’s approval of subconsultants drawings and a defect or error in those drawings caused damage to the owner.


4. Supervision and Inspection – If a design firm assumes responsibility for performing site supervision and inspection, they are bound to use due care in the performance of such duties. The primary purpose of the inspection requirement is to make it a contract obligation for the design firm to provide the owner with assurances that the work is being completed in conformance with plans and specifications.


Case law has indicated “the architect must be diligent in inspecting and supervising the work, but is not obligated to discover every defect in a contractor's or subcontractor's work and will not be liable for defects so long as they are not attributable to carelessness, negligence, or inattention on the architect's part.”


Regardless of limitations over means and methods as stated, failure of the design firm to abide by the contract terms of inspection can result in the firm being held liable to the owner. If it can be established that the firm breached this obligation, and this breach was the “proximate cause” of a failure to discover a defect, the firm may be liable to the owner for the cost incurred in correcting the defect.

NOTICE: The information in this newsletter should not be construed as legal advice, nor intended to replace legal advice specific for your firm or circumstances. Comments, advice and suggestions are for informational purposes only.

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Risk Performance Strategies

SmartRisk is a leading risk and performance management consultancy for design and construction 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, CERG, 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.

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