A&E market evolving with changes in the economy

Professional liability insurance was created for architects and engineers in 1957 by Victor O. Schinnerer. Before then, architects were not viable targets for claims. Today, contractors and consumers are quick to point the finger at architects, alleging negligence or failure to perform services. Consider this real-life loss scenario in which the negligence, and therefore the costs, are passed along the multi-party chain to the designer:

An architect was retained to design a new performing arts center. To cut costs, the city took over construction administration. Some of the finish work in the auditorium included installation of veneer core modesty panels for the front row of the balcony. After completion of the project, one of these modesty panels fell upon a patron as a result of a child kicking the panel during an event. Suit was brought against the city and the city filed a third party complaint against the architect.

This type of scenario can occur with almost any project. In addition to costs brought on by injuries or negligence, A&E professionals must consider fluctuating variable fuel, material, and technology costs, making professional liability not only a necessity, but a vital business strategy.

Learn more tips on how A&E marketing. Read "How we connect with architects and engineers."

Nobody's perfect
The definition of "standard of care" maintains that people are not perfect, and an architect or engineer is no exception. In fact, the Guide for Amendments to Owner-Architect Agreements emphasizes that "The law… does not expect architects to provide perfect or flawless services or to guarantee or warrant the results of their services." However, agents should caution their clients when using phrases such as "best," "superior" or "most qualified," as it may create unattainable expectations. The reality is that something is bound to happen differently than planned. If your clients project themselves as honest yet imperfect professionals who equip themselves with the appropriate coverage, consumers may be more understanding when it comes to pointing the finger.

When changing or establishing new professional liability insurance, architects and engineers should look for the following:

• The insurance provider or MGA should have expert knowledge in the field and a technical background that allows them to speak the same language with regard to the client's business, their specific needs and the specialized coverages available for small A&E firms. The client should trust that their insurance provider carefully listens to them and serves as sage, empathetic counsel.
• The insurance provider should be able to extend coverage to other specialized areas. For example, engineers who specialize in technology may require additional tech-specific insurance. By working with a company with access to other specialized coverages, the client can trust they are getting the most comprehensive and customized insurance available.
• A&E clients should look for competitive pricing and high-quality service. The A&E industry has changed significantly over the past several decades, and today, plans and documents are scrutinized in great detail to prevent unnecessary mistakes or costly lawsuits. This increased focus on managing risk among A&E firms has created a significant demand in the insurance market. A&E clients have choices when it comes to insurance coverage, and they should choose a provider that can offer the best value with superior service.

The last half-century has brought significant changes to the way architects and engineers conduct their business and protect their risks. The economic climate may improve, and industry methods of documenting and covering tracks may reduce risk, but mistakes are inevitable. As a trusted insurance agent, you can arm your A&E clients with the most comprehensive insurance on the market. Today's architects and engineers are held to high standards of performance. Offer them professional liability insurance that lives up to those standards.