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Design and Construction is Changing and So is Insurance

In 1974 Fortune magazine predicted that by 1980 all projects of any significance would be coordinated by at-risk construction managers. Forecasts of changes in the American system for designing and building capital assets have a way of being overpowered by reality. But it is clear that clients and the economy are driving changes in how designers and contractors will function. One of the most fundamental changes is the concept of Integrated Project Delivery (IPD).

The shared-risk, shared-profit collaborative aspects of IPD result in many aspects of the relationship being defined contractually. But it is unclear how courts will construe the provisions of multi-party agreements with extensive waivers of rights, unusually limitations on risk and blurring of responsibilities. Contractors and construction managers are likely to face significantly increased exposure to their clients and third parties related to the design of projects. The involvement of multiple parties in design should result in a level of responsibility that cannot be assigned or allocated only to the credentialed design professional.
While the goal of IPD is to have the parties share risk as a way to protect project-based interests, there is an insurance gap in the IPD system that can best be solved by having a project-based policy that cultivates the commonality of interests in completing a project.
Schinnerer and CNA have responded to this gap by developing professional liability exposure coverage for all members provided design or design and construction services through a multiparty agreement on a project basis. The new coverage option includes professional liability, pollution incident liability coverages, and contractors design liability coverage. While this project-based coverage will not be available on extremely large or high-risk projects, it will respond to the need for a dedicated policy to cover the design exposure on projects such as office buildings, public and private educational and healthcare facilities and certain residential, commercial and mixed-use projects. Look for further announcements on this innovative coverage for IPD teams.

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Posted by Kate Frownfelter on September 30, 2010 3:49:00 PM EDT #

Architect and Engineer's Professional Liability Discussions

Welcome!

Welcome to Charrette! A blog for design professionals and their trusted advisors to talk about issues surrounding their profession, insurance implications and design liability.

First a little about me, I am currently the manager of the Construction Program at Victor O. Schinnerer, Inc. We underwrite and provide professional liability insurance for over 19,000 design professionals throughout the United States. We have been providing professional liability insurance to design professionals since 1957 – we are the oldest provider in the industry.

I started my career as an architect working for a couple of design firms and then decided to go to law school and work to represent the interests of design professionals. I found my way to Schinnerer and started in the Risk Management department of our company and then migrated to the underwriting side of the business.  You can visit our website at either www.Schinnerer.com or www.PlanetAEC.com to gain more information about us.

 "What is a Charrette?" A charrette is an intense period of collaboration that provides solutions for design problems within a set time frame. While in Architecture School we held charrettes when we were assigned a problem to discuss our solutions in a community forum. That is similar to what we are going to do here.  This blog is going address issues facing the design community, its trusted advisors - such as lawyers, insurance advisors, and how these issues might impact design liability.

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Posted by Kate Frownfelter on August 25, 2010 1:07:00 PM EDT #