Top 10 Common Design Firm Insurance Claims

Midway through the summer, I thought I would take a few minutes to muse through common complaints against architect and engineer firms.  The list below identifies common negligence issues; while these are real concerns for architects and engineers, Maloney & Company, LLC clients are well-prepared to prevent claims by proactively adopting the practice management techniques we share with them, and by tightening contract language using clauses and phrases that we suggest.  We have been helping design firms for over twenty years, and we have seen what works and what doesn’t.  We focus your attention on controlling the things you can affect.

  1. Structural Failure: An architect designs a commercial building, and after its construction, a structural failure occurs due to an inadequately supported roof. The collapse results in property damage, injuries, and lawsuits that name the architect and structural engineer for design flaws and negligence.
  2. Code Violations: During a routine inspection, it is discovered that a recently completed residential project fails to meet certain building code requirements. The architect is held liable for not adhering to the local building codes, leading to additional expenses for the client to bring the property up to code.  We were lucky the DoB did not require us to undo the construction!
  3. Water Leakage and Mold Issues: In a multi-story office building designed by an architect, water leakage issues start to manifest a few years after construction. The water intrusion causes mold growth, posing health risks to the occupants and necessitating expensive remediation efforts. The building owner files a claim against the architect for improper waterproofing design, including improper flashing.
  4. Delayed Project Completion: An architect is hired to design a new sports complex, but the project experiences significant delays due to extended approval processes, contractor disputes, and material supply chain issues. The client blames the architect for not foreseeing potential challenges and seeks compensation for financial losses resulting from the delay.  And this was after the COVID supply chain delays had resolved!
  5. Inaccurate Measurements: In the construction of a high-rise residential building, the architect provides inaccurate measurements for the placement of load-bearing columns. As a consequence, the building’s structural integrity is compromised, and corrective measures are required to make the building safe, leading to a claim against the architect for design errors.  Measure twice, cut once, it was hard to believe this one…
  6. Design Copyright Infringement: An architect creates a unique and innovative building design for a client, based on a rough sketch provided by the client.  Turns out that the client had ordered those plans online, and when the original architect saw that a similar house was being built for that homeowner, they sued the architect for copyright infringement.
  7. Personal Injury: A visitor to a building suffers an injury due to a slip and fall accident allegedly caused by poorly designed front steps. The injured party holds the architect responsible for not considering public safety in the design and initiates a personal injury claim.  In this case the design had been completed several years earlier, and we were able to show that thousands of people had safely walked up and down those steps, and that the culprit was really poor maintenance.
  8. Noise and Sound Transmission Issues: An architect designs a mixed-use development with residential units above commercial spaces. However, inadequate soundproofing between floors leads to complaints from residents about noise disturbance, resulting in a claim for improper design and a failure to adequately monitor the construction.
  9. Environmental Impact: In the design of an industrial facility, the architect fails to incorporate sustainable and eco-friendly practices, leading to adverse environmental impacts such as increased energy consumption and waste generation. The project owner through LEED Gold would generate significant energy cost savings, but of course that is not necessarily the case.  Even earning an Energy Star designation may not result in lower utility bills.
  10. Cost Overruns: Despite careful planning, an architect’s project experiences substantial cost overruns during construction due to unforeseen circumstances and changes requested by the client. The client alleges that the architect did not provide accurate cost estimates and seeks reimbursement for the additional expenses incurred.Costs for changes and betterment should not be born by the architect, and we were able to make that case successfully.

I visited a well-known architect in NYC earlier this month.  I was amazed to find that their insurance broker was an expert–in Directors & Officers insurance, not in professional liability insurance!  This firm was not getting the type of critical advice they deserve to save time and money by avoiding costly claims.  If you are paying the same amount in premiums, make sure you are working with an expert in professional liability coverage like Maloney & Company, LLC.  We help clients through claim scenarios like the ones above, but also help them avoid claims in the first place.

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