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O P I N I O N
B efore inking a deal on a new project, architects and engineers should conduct a thorough review of the contract. These days, the use of onerous contractual wording has become widespread. It can greatly expand the design professional’s overall exposure and add potentially significant uninsured liabilities. Look before you leap A/E firms with new projects should carefully examine their contracts, or risk expanding overall exposure and adding potentially significant uninsured liabilities.
Wayne Marshall GUEST SPEAKER
Accordingly, as part of any contract review, pay close attention to indemnification clauses. Often, project owners seek indemnity from design professionals for claims and expenses in See WAYNE MARSHALL, page 12 “Before inking a deal on a new project, architects and engineers should conduct a thorough review of the contract. These days, the use of onerous contractual wording has become widespread.”
To put contractual reviews in context, it helps to understand what an A/E firm’s professional liability policy will and will not cover. Specifically, these policies are intended to cover claims arising from professional negligence or malpractice. They address claims for bodily injury and property damage, in addition to economic loss. On the other hand, underwriters of this insurance want to avoid covering certain types of risks, such as contractual liability, so they inserted exclusions to limit coverage. Thus, if you sign a contract shifting a financial obligation to your firm that would not otherwise exist under common law or statute, then your professional liability insurer may deny coverage.
THE ZWEIG LETTER October 30, 2017, ISSUE 1222
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