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DAN KNISE, from page 5

❚ ❚ Energy OPTICS. Pennoni recently launched a proprietary web-based active energy management platform that enables end-users of all sizes to better manage their energy budget and optimize their energy use. In using the program, end-us- ers get an enhanced view of each component of their energy spend, which helps to identify future opportunities for cost reductions and savings. ❚ ❚ Proctor & Gamble (Fluor Corporation). Pennoni is work- ing with global engineering and construction company Fluor Corporation on a new Procter & Gamble manufacturing facil- ity – projected to be the largest manufacturing facility in the world. Risk management requires formal processes and continual attention. Along with having the appropriate framework and tools up front, it’s important to maintain an open dialogue and good communications with your subconsultants. Finding out about problems early allows you to take action to correct any errors or mitigate any risk to the project or your firm. DAN KNISE is president and CEO at Ames & Gough . Contact him at dknise@amesgough.com. from you (and your own insurer), for losses it pays. HAVE SUBS “FLOW DOWN” YOUR REQUIREMENTS. Be sure your sub- consultant agreement stipulates that provisions (including all insurance requirements), in your agreement with the owner or manager must “flow down” to subconsultants and subcontractors of the sub you hire. We’ve seen losses arise from uninsured or underinsured subs of an A/E’s sub- consultants or subcontractors. While there may be valid reasons to use subs that do not meet your minimum insurance requirements, you should have a formal approval process for any exceptions. Determine who within your firm can approve an exception and under what circumstances. ❚ ❚ Business Automobile Liability: $1 million per occurrence/ag- gregate ❚ ❚ Employer’s Liability: $500,000 per disease/injury ❚ ❚ Professional Liability: $1 million per claim/aggregate Larger or more complex undertakings should also require umbrella/excess liability with a minimum limit of $3 million to $5 million. INSURANCE POLICY ENDORSEMENTS ENHANCE PROTECTION. Include de- tails in your subcontract insurance specifications on cover- age extensions that can further protect your firm. For ex- ample, your firm should be listed as an “additional insured” on the subcontractor or subconsultant’s commercial gen- eral liability, business auto liability and, if applicable, con- tractors’ pollution liability policies. This coverage should be denoted as “primary and non-contributory.” Also, confirm the presence of a “waiver of subrogation” (by endorsement, if need be), in each policy, including commercial general li- ability, workers’ compensation, business auto liability and, if applicable, contractors’ pollution liability. The waiver prevents the sub’s insurer from seeking indemnification

credentials and seek references if you’ve not worked with them. Find out if the firm has been involved with troubled projects and examine its financial health. Firms in financial difficulty might over-reach to get work or cut corners to im- prove profitability. ❚ ❚ Clarify the scope of work. Claims often arise from a lack of clarity about who is responsible for what on a project. Have a clearly defined scope of work and require subconsultants to follow through, fill their intended role, and complete all as- signed tasks. ❚ ❚ Have a signed contract. The first line of defense when prob- lems or claims arise is the contract between the subconsultant and the prime engineer or architect. Design firms should have a standard subconsultant agreement that has been reviewed by legal counsel. It should address scope of work, standard of care, indemnification, ownership of documents, etc. Equally important is the fair allocation of risk and clearly defined in- surance requirements (see below). ❚ ❚ Require subconsultant insurance. Your subconsultant agreement should detail the minimum insurances for your subconsultants to carry. The goal is to have their insurance respond first to pay any loss, with your firm’s insurance re- sponding only if their insurance policy limits are insufficient to satisfy the full amount of the loss. Insurance coverages typically required include: ❚ ❚ Commercial General Liability ❚ ❚ Business Auto (or hired and non-owned auto as part of the CGL) ❚ ❚ Worker’s Compensation and Employer’s Liability ❚ ❚ Umbrella/Excess Liability (if appropriate to provide in- creased limits) ❚ ❚ Architect/Engineers Professional Liability (including pollu- tion liability) Depending on the project, it may be appropriate to require additional coverages (e.g., builder’s risk, if the design firm is responsible for construction as well), or to modify the minimum limit requirements to account for project size and complexity. You should also establish minimum limits of insurance by policy type. While such limits should account for the project scope, complexity, and risk profile of the sub’s work, here are some recommended minimums: ❚ ❚ Commercial General Liability: $1 million per occurrence/ aggregate

PENNONI, from page 7

Pennoni has completed several projects it’s particularly proud of. Here is a small sampling: ❚ ❚ Vine Street Expressway/I-676 Bridge Improvements. The project site is located in the middle of Philadelphia’s art and historic districts. A major benefit of this project is improving how commuters access a number of Philadelphia’s landmarks. In doing so, the firm is reshaping the aesthetics and the ex- perience of visiting Philadelphia. An added challenge came in September 2015, when they had to coordinate the project in the midst of a visit from Pope Francis.

THE ZWEIG LETTER April 25, 2016, ISSUE 1149

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