Tag Archives: risk avoidance

New Green Standards; Same Green Warnings for Architects & Engineers (law note)

Posted on by

The newest version of the LEED ratings system, LEED v4, has officially been released.  For a comparison of the major changes between LEED 2009 and LEEDv4, check out this downloadable form from the USGBC.

As the folks at Schinnerer’s pointed out, there is one major change that is fraught with peril for design professionals– the requirement for increased transparency concerning the composition and performance requirements of composition materials.

Notes the insurance carrier:
While design firms always had a level of responsibility for ongoing product research, the lack of standardized, affirmative industry data made it difficult for design firms and project owners to assess the impact of building materials on human health.
As with many aspects of sustainability in design and construction, the danger to design firms is likely to come from self-inflicted perils. When a firm accepts responsibility to “ensure that a project meets its goals by using the best products that align with project requirements,” it is essentially giving the project owner a guarantee that is both beyond the firm’s control and uninsurable by any insurance carried by a firm.

 

What is an architect or engineer to do?  NOT make guarantees.  That’s the easiest way to avoid potential problems and lawsuits down the road.

Inform your client that any green design guarantees may cause an otherwise covered claim to be denied by your errors & omissions insurance carrier.  Show them this post, or the Victor O. Schinnerer (CNA) blog article.  Whatever you do, do not make guarantees related to green design.

Your turn.  What has been your experience educating clients concerning green “guarantees” and the uninsurable nature of any such contract provisions?  Share in the comments section.

Photo adapted from (c) Albert Herring. 

Avoid Disaster: Have Your Contracts Reviewed (guest post)

Posted on by

Today, we have a guest post by on of my comrades in crime (that is, a fellow construction law blogger), Chris Hill.  Here’s his official bio:  Christopher G. Hill, LEED AP is Virginia Supreme Court certified mediator, construction lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC.  Chris authors the Construction Law Musings blog where he discusses legal and policy issues relevant to construction professionals.  His practice concentrates on mechanic’s liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals.

———————————————————————————————————————–

Chris Hill, AttorneyFirst of all, thanks again to Melissa for letting me post at her fine blog.  She’s one of the more knowledgeable and cool Tarheels I know (and this is coming from a Blue Devil!).  Now, on with the show.

As those who read my Construction Law Musings blog on a regular basis know, I am a huge proponent of getting a knowledgeable attorney involved in your construction contracting business early on.  While we construction lawyers are generally seen as last resorts, we can actually be helpful and (dare I even say it?) save you money.  How, you may ask, can paying a construction lawyer that ostensibly is only there when you have a claim actually save you money?  Well, as you may have gathered by the title of this guest post, I’m going to tell you.

Two words:  Disaster avoidance.

Litigation is a money, time and emotion draining process for those that don’t have the particular odd propensity of the litigator that makes them actually enjoy trials.  Litigation takes money from the bottom line because no business this side of a cigarette or pharmaceutical company can do business planning to sue or be sued.  For that reason, litigation cannot be treated as overhead and even in the case where you could get a judgment for any fees that you may spend, you are still out the cash and even then may never recover on the judgment.  A contractor cannot make money through litigation (at least in my experience).

Even in the case where you are “right” and “should never lose” there is risk in court.  Juries, arbitrators and judges sometimes go the other way.  These are humans.  They are fallible and in many ways unpredictable.  Litigation is (and should be) a last resort.

The best way to avoid this result is a good contract and good advice from those of us who have seen the results of litigation on numerous occasions and that therefore know how to avoid it.  Everything from the proper claim and notice procedures to a well scoped project are necessities up front.  Aside from the “common sense” issues that you as a business person will see coming, an attorney can see the picky “traps” that are there and are counterintuitive.  For instance, Virginia, unlike many other states, allows the waiver of mechanic’s lien rights in a contract.  You wouldn’t want to miss this thinking that you “knew” that such a clause was unenforceable.  [Editor’s Note: By comparison, in NC, such a waiver in advance is against public policy].

Much like your bi-annual visits to the dentist (yes, I compared my profession to one that is almost as popular), the relatively small expense of early review of your contracts and business practices can go a long way toward avoiding surprises and disastrous expenses later.  In short, and as you learned in kindergarten, doing it right the first time is always easier than fixing the problem later.

My final advice:  Add a lawyer to your team of advisers, you’ll be glad you did.

———————————————————————————————————————–

Thanks, Chris, for another fine post.  And I completely agree:  the number of hours spent on claims will vastly supersede the small cost for most companies/Firms to properly prepare and vet their contracts and proposals.  Chris and I welcome your comments, questions, and thoughts!

 

How is that possible? State Law variations can snag you! (law note)

Posted on by

Today I’m guest posting over on Construction Law Musings.  My post, entitled “You Mean They Can Do That?” discusses the fact that there are different legal hurdles that can present challenges to your Architecture or Engineering Firm when you venture across state lines.

skatesAs I state in the post, just as licensing issues and building codes differ, so too do the laws.  Your best defense?  A good offense. Get help specifically tailored to the new state up front so you won’t get pinched later on.   In other words, don’t be a cheapskate!

Read the full post here.

Thoughts? Comments? Questions?  Share in the comments below.

Photo (c) Jan Andersen

 

Adding an “Additional Insured” in the Professional Services Agreement: an exercise in futility! (law note)

Posted on by

As an architect or engineer,  you may be asked to sign a contract that has a requirement of adding the Owner (or Contractor, in a design-build project) to your own insurance as an “additional insured”.  This is usually a fall out of the fact that the Owner is treating you like a contractor and using “stock” contract language.  It is not appropriate, nor sometimes even possible, to add the Owner to your professional liability policy.

This is beacuse professional liability insurance only provides coverage for “professional services”.  That is, if it is even possible to buy such coverage, it won’t work to avoid any risks the Owner is seeking to avoid, because the Owner is not providing licensed architectural or engineering services on the Project.

In fact, because of the way professional liability policies are generally written, naming the project Owner as an additional insured essentially voids any coverage for the owner for your Firm’s design errors & omissions.

What should you do with a stubborn Owner who insists he wants to be an additional insured under your E&O policy?  Explain the facts to him, and point out he is risking voiding coverage all together.  Tell him to call me, or point out this post to him.  Also, several insurance brokers, agents, and companies have simple one or two page information sheets that you can provide to the Owner to help with his education.

Remember, having an “Additional Insured” in an Errors & Omissions policy is a true exercise in futility.  It may not be what the Owner wants to hear, but such is life!not want to hear

 

Question time:  have you ever been asked to add an Owner to your E&O insurance?  How did you handle it?  Share in the comments section, below. 

And if you haven’t already, be sure to download your free white paper on the 7 Critical Mistakes that Architects & Engineers make– it’s in the box on the top right hand side of the blog.

 

Photo credit.

Architects & Engineers – Liaising With Contractors (guest post)

Posted on by

Today’s guest post is by David Morrison.  David has worked on both sides of the construction site during his time in renovation.  Having stepped from the gravel pit into the office a few years ago, David currently now works with UK Tool Centre, liaising with the industry on their behalf.

Working as a site engineer or lead architect has many challenges and is undoubtedly one of the toughest roles, interwoven around effective communication skills with the clients as well as the site contractors, subcontractors and suppliers.

Since maintaining discipline and accountability is at the core of any successful venture, the same is true for a construction site also. The site engineer plays the “unwanted” role of implementing carrot and stick policy, awarding the effective contractor and dealing with the laggard.

carrot with club

 

For those beginning their engineering and architectural careers, or for those who still struggle to maintain a tight ship when dealing with contractors, there are a number of things to keep in mind.

a.)    Organizing Self – The way a site engineer organizes his work plays a very important role in meeting the final objective and let the workplace run as a team. The first and most important thing is to set an example by doing things in the same manner as you are requiring and expecting from the contractors.

b.)    Be Clear – A site engineer must ensure that the contractors have clear instructions, drawings and specifications related to their work. Otherwise the “garbage in; garbage out” rule shall be applicable to the final outcome.

c.)     Work Milestones – A site engineer should coordinate with the general contractor, who in turn should use professional project management tools, define work milestones and interact with the subcontractors to keep an eye on their timely completion. If any issues arise, they must be addressed quickly, so that the contractor or subcontractor’s work is not delayed.

d.)    Performance Appraisal – Informing  a contractor of his performance quality is only half the job; informing him in a timely manner is the remaining half. The site engineer should develop methods of regular assessment of work of each prime contractor, and should include this information in regular project meetings. This allows the site contractor to timely identify the gaps (both related to man and machine) in his work and to take action to complete the work successfully.

e.)    Teamwork, Motivation and Inspiration – To foster teamwork among various site contractors, a site engineer should know how to dig into his own experience of similar works. He should always work to motivate them by giving good and bad examples out of his experience. A well experienced site engineer always have lots of good advice from his earlier encounters to inspire the contractors and give them potential solutions to difficult tasks and situations.

f.)     Prompt Payments – A site engineer must always ensure that as per contractual terms with contractors the payment for the various milestones must be promptly processed and done without any delay. This is of utmost importance in getting the work done from contractors on a construction site.

g.)    Safety – A site engineer must always ensure that contractors shall never compromise on safety and security rules to expedite the work. A bad accident can be devastating, to the individuals involved and also to the project schedule.

h.)    Friendship, Philosophy and Guidance – A site engineer should know how to work as a friend-philosopher and guide to the contractors and must not always act as bully. After all, the contractor may have some genuine issues with the design team’s performance as well.

Advice for construction is ten to the dozen and there are a lot of potential misguiding mantras out there.  One of the most useful to take into account has always been: “It may take a lifetime to learn the ways to deal with contractors on-site, and still a lot will be left to learn.”

 Thanks David.  Now it’s your turn.  Thoughts, comments, questions?  Share in the comment section below.

Photo courtesy Teaching Underground.