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O P I N I O N
T oday’s contracts involving design firms and owners, project managers, and other participants, are increasingly subject to the dynamics of how projects are run; in particular, more owners now realize that “minor” changes in contract language may significantly shift risk allocation. Professional service pitfalls Even minor changes in contract language can create major liability and insurance issues for design firms, so be aware of what’s out there and act accordingly.
Rob Hughes
municipal entity pertinent to financial products or the issuance of municipal securities. This raises not only the issue of whether the engineering firm should be registered as a “municipal advisor,” but also if “standard” professional liability insurance policies actually will cover any related claims. For example, an engineer’s insurance company denied a recent claim involving the firm and a municipality, deeming the engineer’s deficient “Identifying these issues is the first step; offering your clients possible alternative language is the second step. The third? A successful, profitable project!”
In this context, let’s examine some emerging situations and contract language that may create expanded liability and potential insurance issues for design firms. Identifying these issues is the first step; offering your clients possible alternative language is the second step. The third? A successful, profitable project! MUNICIPAL ADVISOR AND SCOPE OF WORK. Engineers are excluded from the SEC’s definition of municipal advisor “to the extent that the engineer is provid- ing engineering advice.” The provision of engineer- ing feasibility studies that include certain projec- tions – such as output capacity, utility project rates, project market demand, or revenues based on engineering aspects of a project – generally fall under this exception. Even so, the exemption may not encompass situations where engineers provide advice to a
See ROB HUGHES, page 12
THE ZWEIG LETTER September 12, 2016, ISSUE 1167
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