Engineering Inc. - January/February 2009 - (Page 28)

How Do you expect your rates to Change in 2009? 43.75% Remain Flat could be obliterated” and clients could be left with “the potential for unlimited liabilities and potentially uninsurable risks.” Sullivan points to the importance of effective contracts. A contract will govern how a dispute unfolds, and a strong contract “will bring you through a tough time with an owner,” he says. Pre-claims assistance “varies greatly by carrier,” but should be an important factor in any PLI decision, adds Corbett. Duffett also encourages firms to contact their carrier any time they need help “figuring out how to talk to a client, whether to document a discussion, or if they need to send a letter to correct a misunderstanding.” Travelers has added crisis event coverage to its standard A/E PLI policies to protect its insureds’ reputations,” says Farran. The policy covers public relations consulting in response to an event that an insured believes could adversely impact its reputation. To navigate among all these options, Paula Dixon, president of the Professional Liability Agents Network (PLAN), recommends that firms work with an insurance agent or broker who specializes in professional liability coverage for design and environmental firms. “They can pro- � � 37.50% Unsure/Not Reported 18.75% Lower � Source: ACEC’s 2008 Professional Liability Insurance Survey of Carriers vide a wealth of risk management tools, such as contract review services, and help you select the right carrier to meet your needs,” says Dixon. “They’ll help you separate the seasoned carriers who are in the market for the long term as opposed to those who will likely be the first to bail if the market turns south.” Future Risks I t’s time for design firms to follow the lead of contractors and carefully examine a client’s finances before accepting a speculative project. PAULA DIXON PLAN Though mold and asbestos claims have stabilized, Sauter says, the flooding caused by Hurricane Katrina and other recent devastating storms has brought the condition of levees to the fore. Changes to the U.S. Army Corps of Engineers’ levee certification requirements could introduce considerable new risk for firms. Many have been asked to assess the condition of levees without full information on the original design or current conditions. Sauter advocates that the industry work together to “make sure we have the appropriate risk shared between the Corps and the consultant community,” so that public risks are not placed on a consultant through contract requirements. ACEC continues to work with the Corps on efforts to properly allocate that risk. Carriers also continue to monitor risk trends in Leadership in Energy and Environmental (LEED) certification and sustainable design. Higher claims have not yet materialized in this sector, notes Farrar, but carriers are concerned that owner expectations are driving the standard of care higher. The familiar cautions still apply, he says: treat LEED as a goal, because your policy may not cover a guarantee; make your client aware that newer materials have not been as thoroughly tested and might not be as good as existing ones; and have your insurance carrier carefully review these contracts, as they often carry more risk than a standard project. Integrated project delivery and Building Information Modeling (BIM) also are on most carriers’ radar. Though the inherent collaborative nature of BIM blurs many liability boundaries, Duffett says that the increased cooperation and integration of the process also might mean fewer errors. Travelers launched a new PLI policy in November to cover network and information security, partly to address the emergence of BIM, says Farran. Such a policy is meant to protect firms against claims arising out of any virus transmitted by their network, failure to give access to the insured’s computer system or failure to prevent unauthorized access to private information. PLI experts say it’s hard to predict the market’s near-term future, especially considering the tumultuous and interdependent state of the economy. However, Sauter says he is hopeful President-elect Barack Obama’s administration will invest significantly in infrastructure, possibly as part of an economic stimulus package. Corbett says it’s important for a firm to “do your homework” and find the latest available information on your carriers’ financial status, and it’s “very important to research and evaluate who a firm is, what their financial capability is and who is behind the scenes.” PLAN’s Dixon adds that the financial status of clients and potential clients is equally important. “It’s time for design firms to follow the lead of contractors and carefully examine a client’s finances before accepting a speculative project.” n Maureen Conley is a business writer based outside Washington, D.C. 28 enGIneerInG InC. January / February 2009

Table of Contents for the Digital Edition of Engineering Inc. - January/February 2009

Table of Contents
Engineering Inc. - January/February 2009
From ACEC to You
News and Notes
Market Watch
Legislative Action
Exclusive Interview
RX to Ease Employer Health Care Pain
2009 Spring Course Catalog
That's Entertainment
2008 Professional Liability Insurance Survey of Carriers
Annual Convention Preview
Members in the News
Business Insights

Engineering Inc. - January/February 2009