Better by Design
Architects: Professional Liability Considerations When Working with Clients

Today's business world is extremely litigious, and professionals of all kinds are finding themselves facing unexpected costs and tighter budgets as they dedicate funds for legal teams and court fees. Architects are no exception. During the lifespan of a project — from drafting a design to supervising construction — a lot can go wrong. Even once the project is completed, architects aren't off the hook. Months or even years after construction, architects can be hit with a lawsuit out of the blue.

The best way to prevent a client from dragging your business into a legal mess is to be knowledgeable about your professional liability exposures and how to minimize them. (To get a sense of what risks you might face, read, "5 Ways to Protect Your Architecture, Engineering, or Design Business.") Let's discuss how communication, contracts, and business insurance can help address your liabilities.

Architects: Pay Attention to These Potential Lawsuits

Architects: Pay Attention to These Potential Lawsuits

For architects, the threat of legal trouble is always present. For example, let's say…

  • You complete a project to the client's satisfaction, but later, the client sues you when he realizes he can't afford to maintain the building. He alleges that you should have known this and accommodated your design.
  • A building is completed and your client holds on to the plans. Unbeknownst to you, the client later uses the same plans for a building in a totally different climate. They sue you over the design when snow collapses the new building.
  • Years after construction, new owners of the building you designed sue you for what they feel are design flaws.
  • A client stops paying invoices while you're working for her. You sue her for payment, but her legal team countersues, claiming defects in your work.

In many cases, the lawsuit will be meritless or the client will be in the wrong. Other times, you may be liable. Either way, handling these lawsuits can drain valuable time and money from your business.

Ways to Protect Your Architecture Business

Ways to Protect Your Architecture Business

Most of the previous examples could have been avoided with the proper communication and foresight. Making sure your client understands the contract and taking measures to protect your designs can go a long way toward mitigating risks. Here are some other ways to help protect your architecture firm from the high cost of lawsuits:

  • Use client contracts. These can help you avoid lawsuits by clearly laying out your responsibilities and offering action steps for settling disputes without going to court.
  • Foster good communication between you and your clients. If problems arise, address them quickly. Keep your clients in the loop about the progress of the project.
  • Have a retainer. You could require monthly payments on a project to ensure you are paid for your work in a timely fashion.
  • Practice sound business principles. Checking work, furthering your research and education, and maintaining quality control can help prevent defects in your work.
  • Don't take on jobs you can't complete. Exceeding budgets and timelines can inevitably lead to lawsuits over breached contracts.
  • Keep Errors and Omissions Insurance active throughout the life of your business. If changing policies, make sure there are no gaps in your coverage. Errors and Omissions Insurance is claims-made coverage, which means the same policy must be in force when the work was done and when the claim was filed in order for you to receive coverage.
  • Make sure your policy covers the type of work you do. E&O policies are written expressly to cover the services you offer. Report any changes in your offerings to your insurance agent to ensure your policy is still adequate.

If you need to purchase an Errors and Omissions Insurance policy, or if you require additional policies, insureon can help. Fill out an online application for free quotes.

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