Why Architects and Engineers Need Errors and Omissions Insurance

A Professional Liability Update
Architects and engineers have unique exposures.  If they don’t perform to a set of standards they are at risk of being sued and have the possibility of loss of reputation. This is where Architects and Engineers (A&E) errors and omission insurance can help.
A&E Insurance covers liability for alleged or actual damages that result from the performance of professional services.  All design professionals including residential and commercial architects, design/build architects, engineers, landscape designers, and specialty construction consultants, should consider professional liability insurance.

Here are a few actual claims
An architect firm was hired to design an HVAC system in a school.  The design was discovered to have a flaw that caused exhaust to be brought back into the building.  The resulting damages and legal fees totaled over $1,500,000.

An A&E firm designed a 55-unit apartment complex. Three months after completion there was water damage to 25 units totaling $90,000.  It was determined the A&E firm’s window frame design was incorrect and the firm was held responsible for all damages. The A&E firm incurred over $110,000 of expenses in replacing windows and related damage.

There are things A&E firms can do to minimize risks including:

• Communicate all change orders in writing.
• Use AIA forms whenever possible.
• Meet with your client regularly.
• Recognize the warning signs of a lawsuit; no communication, work stops, or the clients are making accusations.
• Educate your team.
• If you see an unsafe condition at the work site, report it.

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