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BUSINESS NEWS PENNONI: OFFICE RELOCATION Pennoni , a multidisciplinary consulting engineering firm, is pleased to announce the relocation of our North Carolina office to 5430 Wade Park Boulevard, Suite 106, Raleigh, NC 27607 from its previous location in Chapel Hill. The move took place on Thursday, October 25th. Office Director and Associate Vice President Justin Brown, PE, has this to say about the move, “I feel this move better positions Pennoni for continued growth in the market. It puts us closer to North Carolina State University.” The office is in a new building in a mixed-use development located in the heart of the Research Triangle, an eight-county region anchored by three major research universities: North Carolina State University,

Duke University, and the University of North Carolina. Regional Vice President Sue Wolford, PLA, AICP, LEED Green Associate, ENV SP, expresses her excitement to be in the new area, saying, “Our employees will have more opportunities to walk to restaurants, utilize the trails and paths, and live close to work. This great space allows for anticipated growth; not only for the civil engineering and land surveying groups, but also for other disciplines within our firm like transportation, environmental, and landscape architecture. Raleigh is a larger market for the firm and one of the most important growth regions in the state.” Our Raleigh team looks forward to providing

high quality service to both long-term and new clients from our new location. As a multidisciplinary consulting engineering firm founded more than five decades ago, Pennoni approaches engineering challenges from a wider spectrum of angles than most, from landdevelopment to energymanagement. Our goal is to help communities and private sector clients alike navigate the ever-changing technological advancements available and learn how best to integrate “smart” solutions into the current landscape and make them a part of resilient and sustainable planning. Our combination of talent and experience generates unprecedented solutions for diverse and iconic projects around the globe.

FRANCES RAILEY, from page 5

Thus, if the insured agrees to a “duty to defend,” it is important to agree only to be responsible for “reasonable” attorneys’ fees. Design firms considering this coverage should work with their attorneys to modify the contractual “duty to defend” language. For example, they might consider inserting clarifying language, such as the following: Indemnitee agrees to use panel counsel recommended by [design firm’s] insurer and the duty to defend obligation is expressly limited to claims where there is also an allegation of the [design firm’s] negligence in the performance of professional services. “Professional liability policies have a contractual liability exclusion which denies coverage for exposures policyholders agree to accept by contract unless they would otherwise be liable for them under common law.” Finally, be aware that Aspen’s CDP policy only covers contractually agreed-to defense obligations; it offers no professional liability coverage. So, any firm purchasing a CDP policy will need to maintain its professional liability program. The policy does not provide coverage for “duty to defend” provisions entered into prior to its inception date. Furthermore, as this is a new policy that has yet to be “tested” with claim activity, it’s important to work closely with an experienced broker to review the policy’s terms and conditions, and understand how it works with your professional liability coverage. By taking time to review contractual language carefully and negotiating to remove onerous wording, as well as exploring new insurance coverage options, design firms can take on a wider range of new projects. This may go a long way to helping them meet their growth goals, as they maintain their protection from potentially significant exposures. FRANCES RAILEY is a senior vice president and partner at Ames & Gough. She can be reached at frailey@amesgough.com.

soft commercial insurance market for architects and engi- neers has produced a number of new coverage innovations. One new solution enables design firms to insure at least some of their contractual liability related to the “duty to defend.” In what may be the first of many new coverage solutions, Aspen Insurance (working with Founders Professional) has begun offering a “Contractual Defense Protection” policy. This stand-alone policy, which is in addition to a professional liability insurance policy, works as follows: Suppose you have contractually agreed to defend your client under an indemnification provision. A third party makes a claim against your client that may be related to your firm’s negligence and your client asks your firm to defend them on the basis of the indemnification agreement. You would submit the claim to your primary professional liability insurer, which most likely will decline the claim as an uncovered contractual commitment. In that case, you would then notify Aspen under the CDP policy. Aspen would work with you to select the appropriate legal counsel to defend your client under the terms of the duty to defend provision in the indemnification agreement. The new policy offers limits from $250,000 to $1 million per claim/aggregate. While the CDP policy has no deductible, it does contain an “80/20 co-insurance clause.” In this case, the insured pays 20 percent of defense costs incurred – up to a set limit typically based on a small percentage of the design firm’s annual revenue – and the insurer, Aspen, pays the remaining 80 percent. Premiums typically range from 5 percent to 10 percent of the insured firm’s professional liability premium, but may be higher or lower depending on individual underwriting considerations. Under the policy, Aspen will help insureds select counsel to fulfill their “duty to defend” obligations. However, should the client or insured choose a different defense counsel, reimbursement may be limited to what the policy defines as “reasonable” costs, based on Aspen’s standard rates, with some restrictions.

THE ZWEIG LETTER December 17, 2018, ISSUE 1276

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