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OPINION
Be wary of warranties
A troublesome red flag that’s now becoming more prevalent in design firm contracts involves efforts by owners and their attorneys to insert onerous warranty language. Besides placing an undue and inappropriate burden on architects and engineers, warranties are expressly excluded in their professional liability insurance policies. Besides placing an undue and inappropriate burden on architects and engineers, warranties are expressly excluded in their professional liability insurance policies.
Lauren Rhodes Martin
In fact, the exclusion for express warranties or guarantees is widely considered among the most specific and tightly worded of all the coverage restrictions in professional liability policies. Consider how it reads: “Insurer will not defend or pay under this Policy for any claim arising out of the Insured’s actual or alleged liability under any oral or written contract or agreement, including but not limited to express warranties or guarantees.” STRETCHING THE STANDARD OF CARE FOR AEC FIRMS. Certainly, design professionals – just like those in any other profession – are required to meet the standard of care. By definition, the standard refers to the ordinary level of skill and care that would be provided by another similar firm (or professional) in a similar location. It is established and affirmed by expert testimony. The concept of the standard of care
also applies to – and imposes potential liability upon – medical doctors, lawyers, accountants, and other professionals. To put the misapplication of the standard of care in context, can anyone imagine a doctor guaranteeing a result? Even more remote is the possibility of an attorney doing so; in some legal actions if an attorney states they have a 50 percent chance of prevailing, that might be considered fairly favorable odds. So then why do lawyers working on behalf of owners deem it appropriate to insert warranty and guarantee language in a design contract? Perhaps, one reason may be that there already are numerous types of warranties rightfully in typical construction contracts.
See LAUREN RHODES MARTIN, page 10
THE ZWEIG LETTER NOVEMBER 14, 2022, ISSUE 1465
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