Visual Inspection Service Risk
The shop roofs of a 32-year-old mall below a parking structure collapsed killing two women on June 23 in Ontario. Two months before the collapse, an engineering firm provided visual inspection services and photographs stating the shops were structurally sound. The families filed suit October 1 in Ontario Superior Court for $5 million.
This accident clearly demonstrates the significant liability exposures engineering firms are exposed to when collapses of structures occur and when limited inspection or observation services are provided.
When engineering firms provide a visual, on-site inspection of an existing building or structure, you will be required to make certain assumptions about its condition and reliance of information provided by others. Without extensive, invasive and destructive testing, you cannot know the condition or have the ability to obtain certain facts about the structure.
There are limitations and risk when making these assumptions and when offering visual inspection services. The tradeoffs of extensive destruction testing and limited visual inspection services should be fully explained to the client and the conversation documented. Based on those circumstances, certain contractual protections should be put in place.
Consider language similar to the following:
To the fullest extent permitted by law, the Client agree to indemnify and hold harmless the Engineering firm against all damages, liabilities or costs, including reasonable attorneys' fees and defense costs, arising out of or in any way connected with this Project, excepting only those damages, liabilities or costs attributable to the sole negligence or willful misconduct by the firm.
When offering these services, your firm will most likely have to rely on information, services and/or reports provided by others. This information may be provided from a variety of sources including the Client, Client's representative, consultant, contractor, etc.
For that reason, you should consider language similar to the following:
The Engineering firm shall be entitled to rely, without liability, on the accuracy and completeness of any and all information and services provided by Client, Client’s consultants and contractors, and information from public records, without the need for independent verification.
You are welcome to forward this newsletter to others who may be interested.
Thank you.
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