Sustainable Land Development Today - June 2008 - (Page 36)

RISK MANAGEMENT Managing Subsurface Risk By John P. Bachner The “Leaning Tower of Pisa” is an internationally known tourist attraction…principally because it leans. And millions of dollars have been spent to keep it leaning (as opposed to vertical or – ouch – horizontal), because the lean makes the tower unique. Imagine what the outcome would be were a more contemporary structure to begin leaning during construction, the way the tower did. How many attorneys do you suppose would be willing to help the “Leaning Tower of Trump” achieve true vertical? But Trump’s towers don’t lean because, we presume, “the Donald” is wise enough to know not to skimp on geoprofessional services. Not everyone is wise, of course. Some still believe there is such a thing as free lunch, possibly because they assume they’re bullet-proof, because professionals they retain for brownfield or greenfield development have professional liability insurance (PLI) coverage that will respond to their claims. But usually that’s not the case, although not for obvious reasons. PLI is available solely on a claims-made basis; the coverage that applies is the coverage in place at the time a claim is made, not the coverage that was in place at the time the alleged error was committed. The typical claim arises two or more years after geoservices are complete, meaning that the policy in place at the time the claim is made will not be the one in place at the time the contract is signed or services are performed. True: It may be a renewal of that policy. Also, true: The PLI market is highly dynamic, especially in recent years. As such, the geoprofessionals you rely on today may not have any coverage two years from now. And assuming they do, their policy may have a prior acts limitation that could get in the way (e.g., “We won’t cover any claim made today if the act giving raise to that claim occurred more than three years ago”). Or perhaps the policy’s limit of liability will have 36 June 2008 Sustainable Land Development Today been reached, meaning there’s a large claim in line ahead of yours. Or it may be that your type of claim isn’t covered. Or, if it is, the geoprofessional’s PLI carrier might say, as most do, “We’ll fight this.” And the developer is often caught up in that fray. Put simply, PLI is a tool to help manage your risk. It’s a fragile tool, however, and one fraught with uncertainty. So, while you would be wise to require your geoprofessionals to be insured, that’s hardly a be-all and end-all. Do you really want to manage your risk? Then use qualifications-based selection (QBS) to choose geoprofessional engineers and geoenvironmental consultants on your own or in conjunction with your architect or structural or civil engineer. Do not delegate the task. Start the QBS process by asking peers and other design consultants about the firms they’ve used for similar projects. Contact those firms to provide details about your project. Ask the firms to submit statements of qualifications, including case histories of similar projects performed by people who would be involved in your project. Review the materials you receive. Identify those three or four firms that seem to have the most experience. Contact representatives of the named clients to learn about their experiences. Were the other design professionals they retained satisfied? What about the lenders, insurers, government agencies, and contractors involved? Were deliverables delivered on time and on budget? Did the cost to remediate and/or construct come in as expected? Based on what you learn, you should be able to rank-order the firms. Contact the one firm

Table of Contents Feed for the Digital Edition of Sustainable Land Development Today - June 2008

Sustainable Land Development Today - June 2008 Contents Our Voice Editorial Board SLDT Resources Where Rubber Meets the Road Integrated Planning: The Key To Developing Sustainable Planned Communities Win-Win For College and Community Industry Spotlight: Transoft Unique Organization, Unique Opportunity New Preferred Provider Comments from the Austin Conference Welcome New Members New Knowledge Project Articles Books Going Green Business Management Risk Management Surveying and Mapping Industry News Products/Services Showcase Advertiser Index Classifieds The Last Word

Sustainable Land Development Today - June 2008

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