Land/site development claims can be risky for civil engineers and land surveyors. The average indemnity payment of a site development claim from 2001 to 2010 was more than $108,000. The following is an example of a site development claim:
A civil engineer provided design services for a residential subdivision. His responsibilities included grading and storm drain design, a parcel map, and design of surface improvements, including a parking area. The issue in this claim was a geo-grid retaining wall system that moved and cracked because of a deep-seated, ancient landslide below the wall. The civil engineer showed the horizontal and vertical location of the wall, but he did not design the wall, provide structural calculations, or stake the location of the wall.
The engineer who designed the wall settled for $900,000. Other parties also settled, resulting in a combined settlement of $3,775,000. Although the actual cost to repair the wall was estimated at only $1,600,000, the estimated cost to stabilize the landslide exceeded $9 million and the alleged economic damages were $24 million. The claim involving the civil engineer was settled in mediation for $500,000. Although the civil engineer believed he had done nothing wrong, had he gone to trial his exposure would have far exceeded his available insurance limits; expenses were $150,000.
For more information including risk management advice, please see our entire land/site development claims study
(access limited to current policyholders and brokers only). This study was updated with current statistics in September 2011.