Engineering Inc - July/August 2019 - 30

"Many clients will pay a higher premium to go with a quality
insurance company, as opposed to a carrier that is new to the
A/E market or that does not have good claims service."
MARK JACKSON, PRESIDENT
A/E PRONET
FOUNDING PARTNER, JCJ INSURANCE

with their carrier for at least three years.
"Firms may change carriers if they need to increase their limits and the current carrier would not or could not," says West.
However, he adds that higher limits are typically available. West
advises clients to look carefully at their options. "We give them
as much information as we can as to what they can expect if they
decide to make a change and what the relationship may be like if
they move from a carrier they have had for some time," he says.
Several factors could influence a firm's decision to change PLI
carriers, according to Connelly. These include fewer exclusions,
more say in decisions about whether to settle through a favorable
hammer clause and access to first dollar defense. He adds that
firms may also change carriers if they are unsatisfied with a claim
result or when they see rate increases resulting from a claim.
BROKER BENEFITS

One of the values specialist brokers offer is making sure a PLI
carrier will be a good fit for the design firm, according to West.
"Many PLI policies are similar, so it is up to the broker to analyze the options based on the risk tolerance, profile, types of
projects and limits needed by a design firm," he says.
"Being specialized is very helpful for our clients," Connelly
says. "While carriers do contract reviews, we prefer to do that
ourselves. We have a better understanding of the client as we
take on the responsibility to advise the firm on contracts." He
adds that this relationship becomes especially valuable when
firms begin shopping for PLI. "We have more knowledge of
their claim history and the type of contracts used," he says,

Number of Claims Made Against Firms
Compared With the Prior Year 2018
17%

●

Fewer Than
the Prior Year

●

30%
More Than
the Prior Year

53%

●

The Same as
the Prior Year

which enables Greyling to better advocate for the client.
"Oftentimes, we get new business because the firms are not
getting great service from their current agent," says Jackson. JCJ
Insurance offers contract review services and will provide inhouse seminars even to smaller engineering firms.
AREAS OF EMERGING RISK

When it comes to risk on the carrier side, carriers are watching
for impacts from climate change. Schwartz notes that major
weather events are typically followed by subrogation claims
against designers arising from property damage. In other words,
after the property insurer pays a loss, it may allege building
design or drainage caused the problem. "It is reasonable to
expect that to continue," Schwartz says.
Rabasca is concerned climate-change-related claims may
impact the standard of care for design professionals. "When
maps and codes have yet to catch up to the new reality, what are
a design professional's obligations; are they expected to consider
the risk of damages that can result from failure to take into
account disasters caused by a changing climate; are they dutybound to design for 'resiliency' even if codes and maps do not
require it?" asks Rabasca. It is important to remember that compliance with code does not necessarily mean a design satisfies the
standard of care. Accordingly, Rabasca recommends that "A/Es
take steps to address potential climate change impacts on their
projects and their liability by doing their homework, educating
their clients, documenting their recommendations and asking
clients to sign off on their ultimate decisions. If the client opts
to ignore their recommendations, they should also request an
indemnification," says Rabasca.
Electronic communications-which never disappear-remain
a concern. "Even if you are successful in erasing it completely
from your computer, someone else now has a copy," says Dodd.
Another risk is the potential for data corruption. "The integrity
of a document is no longer what used to be," he warns, as even
password-protected files can be manipulated.
Schwartz is looking at how technology may shape future
claims. Cybersecurity is an increasingly essential aspect of project design, and Schwartz is concerned about the impact on the
standard of care from the need to hire cyber consultants. Especially as owners demand smarter, internet-connected buildings,
Schwartz warns that if engineers do not design against the associated risks, or at least discuss them with project owners, they
risk claims alleging they breached the standard of care. n
Maureen Conley has more than 25 years of experience writing about
science, engineering and government policy in Washington, D.C.

ENGINEERING INC.

JULY / AUGUST 2019

Engineering Inc - July/August 2019

Table of Contents for the Digital Edition of Engineering Inc - July/August 2019