Risk Management Stakes are High for Architects and Engineers

A professional from LeClairRyan offers architects tips on risk management

Risk management is a topic of concern for many professionals, and none more so than those involved in the building trades. “Unfortunately, the stakes are raised in tough economic times,” says veteran attorney Jay S. Gregory, a shareholder in LeClairRyan’s Boston office.

Gregory notes, “There’s a certain population of potential litigants who are always looking for someone to blame, and their numbers seem to increase in times like these. It’s imperative that architects and engineers do everything they can to manage risk and limit liability in a proactive manner.”

“It’s very important that firms structure their client agreements to include an in-house process for developing, tracking, and, when necessary, negotiating issues as they arise,” Gregory says. He stresses that agreements need to clearly define the scope of services being provided and should always include appropriate provisions covering indemnity, waiver of consequential damages, standard of care, and, if possible, limitation of liability. He also discussed the insurability of contract obligations, terms and conditions, and issues related to working without an agreement in place. “Having a properly designed and executed agreement in place is the front line of defense in risk management for architects and engineers, and it goes a long way toward limiting potential liability claims,” Gregory says.

“Still, claims do sometimes arise; that’s just a fact of life in the real world. How well prepared you are and how you react to the situation at hand are critical factors influencing the ultimate outcome of any claim.”

Gregory advises architects to constantly be vigilant for warning signs, noting, “It’s best if you’re aware of any potential problem before your client even knows about it.”