Fee Dispute Mitigation Reimbursements Coverage

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A small silver lining in an otherwise difficult situation

By Liz Molina
Assistant Vice President, Senior Claims Examiner, Berkley Alliance Managers, a Berkley Company

May 10, 2021

As long as I have been managing claims for design firms, one of the primary risk management principles held by architects and engineers (A&E) professional liability insurance (PLI) carriers is that a design professional should avoid suing their clients for unpaid fees.

Why? Because a suit for outstanding fees is usually met with a counterclaim for professional negligence. And, while in general, those allegations trigger coverage under an A&E PLI policy, the attempt to recover the outstanding fees is not covered because fees are not considered damages as defined in A&E PLI policies. Unfortunately, the outstanding fees become part of the negotiations when attempts are made to resolve the negligence allegations. In most cases, the design firm has to significantly compromise its fee claim – and sometimes completely walk away from it – in order to get the negligence claim resolved, even when some of the negligence allegations lack merit or would be difficult to prove. This leaves the design firm frustrated because they end up not getting paid, while at the same time having to spend their policy deductible to defend and/or settle the negligence claim. In essence, they actually lose more money, which does not even include the lost billable time that was spent helping to defend the claim instead of working on projects that generated income.

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Complimentary Webinar | Design-Build Public Infrastructure Projects: Risks and Challenges for Consulting Engineers, and Their Professional Liability Insurers

Posted by & filed under Events.

Presented by:
David J. Hatem, PC, Partner, Chair, Professional Practices Group, Donovan | Hatem, LLP
Andrew D. Mendelson, FAIA, Senior Vice President, Chief Risk Management Officer, Berkley Design Professional

Tuesday, May 18, 2021
10:00 am – 11:30 am Pacific Daylight Time
1.5 AIA Learning Units
1.5 RCEP Professional Development Hours

This webinar has been recorded and is available on demand for Berkley Design Professional policyholders and our appointed agents and brokers on the BDP Risk® Learning Management System.

bdp Risk® lms login

Berkley DP is pleased to offer a live webinar featuring David J. Hatem, PC, and Andrew D. Mendelson, FAIA.

Design-Build (DB) is increasingly popular as the delivery method of choice for many governmental entities (federal, state, and local) for public infrastructure projects. Those owners are attracted not only to the ability to contract on a fixed-price basis with a design builder who is responsible for both design and construction but also to the opportunity to transfer substantial risk—which would traditionally be retained by the owner—to that design-builder.

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BDP Risk® Education That Makes a Difference

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By Diane P. Mika, Vice President and Director of Risk Management Education,
Berkley Design Professional, a Berkley Company | April 12, 2021

Education is a good thing, right? We at Berkley Design Professional certainly believe so. Our BDP Risk® courses and resources are intended to help our insured architects and engineers improve project management practices, enhance business performance and minimize risk.

But belief and proof are not the same. So we went to our data.

The Numbers Tell a Story

Our curious data scientists (otherwise known as actuaries) pored through the numbers—course participation, claim data and underwriting files—and the results were overwhelmingly positive. BDP Risk® education makes a difference in claim frequency, customer loyalty and broker success.

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How Valuable is Berkley Design Professional’s First Claim Deductible Credit?

Posted by & filed under BDP Blog.

By Robert J. Connor, JD, CIC
Senior Vice President, Chief Marketing Officer, Berkley Alliance Managers, a Berkley Company

While professional liability is a real risk to all design firms and purchasing professional liability insurance is a prudent course of action, the fact is that many design firms never have a claim. Berkley Design Professional’s First Claim Deductible Credit recognizes that fact and provides policyholders with significant savings on their deductible if they meet the requirements in the policy.

The specific policy1 language is:
If the first Claim you ever report to us is made against you:

  1. Greater than 24 months after the Knowledge Date shown on the Policy Declarations, then your Deductible obligation for that Claim may be reduced by 25%, subject to a maximum reduction of $40,000; or
  2. Greater than 36 months after the Knowledge Date shown on the Policy Declarations, then your Deductible obligation for that Claim may be reduced by 50%, subject to a maximum reduction of $40,000

If more than one Deductible Credit applies, your Deductible obligation will be reduced by 50%, subject to a maximum reduction of 50%.

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Evolution of the Standard of Care Due to Climate Change

Posted by & filed under Published Articles.

By Andrew D. Mendelson and Dion N. Cominos | Sunday, January 3, 2021

Legal and practice standards for design and construction professionals are evolving due to climate change. While the cause of climate change is an oft-debated topic, the fact of it is largely undeniable. The earth’s global surface temperature and water levels are rising, while severe storms and climatic events have increased dramatically across the United States and not just in coastal areas.

Consequently, the standards of care and legal requirements applicable to design professionals, contractors and others involved in construction will need to be taken into consideration as part of the overall construction process.

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Complimentary Webinar: Enhancing Design Firm Value through Profitability and Effective Business Management

Posted by & filed under Events.

Presented by:
Ian C. Rusk, ASA, CM&AA, Managing Principal, ROG+Partners, LLC
Andrew D. Mendelson, FAIA, Senior Vice President, Chief Risk Management Officer, Berkley Design Professional

Tuesday, February 9, 2021
10:00 am – 11:30 am Pacific Daylight Time
1.5 AIA CES LUs
1.5 RCEP PDHs
Berkley DP policyholders who participate in this program can qualify for a 15% Risk Management Education credit. Contact your agent for further information*

This webinar has been recorded and is available on demand for Berkley Design Professional policyholders and our appointed agents and brokers on the BDP Risk® Learning Management System.

bdp Risk® lms login

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Well-written, Clearly-Defined Contracts Make for Successful Outcomes

Posted by & filed under Published Articles.

by Walter J. Adams, Jr., Berkley Alliance Managers, a Berkley Company

Once again, the American economy is in flux. We’re all now in a wait-and-see game with a virus that is endangering the well-being of both individuals and businesses worldwide.

For some contractors, the projects scheduled before COVID-19 will move forward without delay. Others will be placed on hold or cancelled which will jeopardize the incomes and livelihoods of our nation’s contractors, subcontractors, engineers and architects.

As a result, the written contracts agreed upon between all parties have never been more important. Given the unpredictability shadowing the entire construction industry, plus state and federal regulations and mandates changing daily, every detail of every project should be clearly defined. Agreements that carefully state the risks, roles, responsibilities and rights of every participant, including subcontractors, are essential for ensuring successful, profitable outcomes during the best of times, let alone when circumstances are uncertain at best.

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Berkley Design Professional’s BDP Risk® Learning Management System Named Brandon Hall Group 2020 Silver Excellence Award Winner

Posted by & filed under News Releases.

Monterey, Calif. (November 17, 2020) – For the second consecutive year Berkley Design Professional (BDP), a division of Berkley Alliance Managers, a Berkley Company, has won a Brandon Hall Group Excellence Award for Learning for its BDP Risk® Learning Management System. The 2020 Silver Award for “Best Advance in Custom Content” recognizes Berkley Design Professional’s successful efforts to increase client retention and to help design professionals improve their business practices and decrease claim frequency.

“This year we had a remarkable increase in the number of BDP Risk® users and tripled our course participation,” said Diane P. Mika, vice president and director of risk management education at Berkley Design Professional. “But perhaps the strongest indicator of success is our confirmation of the relationship between risk management education participation and a decrease in claims.”

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Complimentary Webinar: Trends in Outsourcing Responsibilities to Architects and Engineers: Maximizing Opportunities and Minimizing Risk of Self-Certifications and Special Inspections

Posted by & filed under Events.

Presented by:
Thomas M. Fleming II, Esq., Partner, Milber Makris Plousadis & Seiden, LLP
Patrick F. Palladino, Esq., Partner, Milber Makris Plousadis & Seiden, LLP
Jennifer M. Netska, Esq., Associate, Milber Makris Plousadis & Seiden, LLP
Introduced by: Andrew D. Mendelson, FAIA, Senior Vice President, Chief Risk Management Officer, Berkley Design Professional

Wednesday, December 2, 2020
10:00 am – 11:30 am Pacific Time
1.5 AIA CES LUs
1.5 RCEP PDHs
Health Safety and Welfare Qualified

Berkley DP policyholders who participate in this program can qualify for a 15% Risk Management Education credit. Contact your agent for further information*

This webinar has been recorded and is available on demand for Berkley Design Professional policyholders and our appointed agents and brokers on the BDP Risk® Learning Management System.

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Andrew Mendelson of Berkley Alliance Managers to Address Evolving Climate Change Standards at the 2020 CLM Virtual Construction Conference

Posted by & filed under News Releases.

Albany, N.Y. (September 15, 2020) – Andrew D. Mendelson, FAIA, senior vice president, chief risk management officer at Berkley Alliance Managers, a Berkley Company, will participate in the panel discussion, “Weathering the Storm: Evolving Legal Standards in the Era of Climate Change”, held during the 2020 CLM Virtual Construction Conference on Tuesday, September 29 at 11:00 a.m. CDT.

“Climate change threatens the integrity of everything from building envelopes, roads and bridges to communications and utility infrastructures,” says Mendelson. “As a result, codes, standards and regulations are continually evolving to protect against the ever-increasing frequency of severe storms and their potentially disastrous effects. This session will focus on the design and construction of resilient structures that remain habitable, overcome power outages, and manage stormwater and flooding during extreme storm conditions.”

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