Insurance Recovery Partner Alexander Hardiman Reviews Construction Liability Coverage

Architects and engineers can face substantial liability if they make design errors or other missteps that lead to building delays, property damage or injuries. As a result, design firms would be wise to have counsel help them obtain a robust professional liability insurance policy to protect against those risks, according to Law360.

“Unlike [general liability] policies, professional liability policies are generally not standard form, and they can vary widely in terms of definitions and exclusions,” Hardiman noted. “How a policy defines ‘professional services’ is critical.”

One tip Hardiman offered is that a firm’s lawyer can ask the insurer to define professional services as the services that the firm was retained to perform under a contract.

“In that case, the contract will define the scope of the coverage,” Hardiman said.

Moreover, by linking the professional liability policy to an underlying contract, an architect or engineer can secure coverage for a wider variety of potential claims.

“An architecture or design contract may require that a firm adhere to standards higher than professional negligence,” Hardiman explained. “If the scope of coverage is defined by the contract, the policy may cover claims that the insured failed to meet those standards.”