Be a Good Neighbor: Strategies to Mitigate Risk of Damage to Adjacent Properties

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By Andrew Mendelson, FAIA
Executive Vice President, Chief Risk Management and CX Officer
Berkley Design Professional, a Berkley Company

May 9, 2023

One of the emerging 21st Century perils for design professionals, particularly for structural and geotechnical/CMT engineers and architects, is the potential impact of new projects on the condition and even the integrity of adjacent properties.

An architect or engineer’s legal duty is to their client according to the scope and terms of the professional services agreement as well as the responsibilities embodied in state statutes for licensed professionals. However, consideration should be given to adjacent property owners during the planning stages and efforts should be undertaken to protect against claims that could be made by other “injured parties” on adjacent properties.

In states where the applicable law embodies the principle of “joint and several liability,” disproportionate responsibility and financial exposure can be allocated to the design professional—even if their actions had very little to do with the cause of damages to an adjacent structure.

Trends in design and construction claims and litigation indicate the casting of an ever-widening net with plaintiffs seeking defendants with deep pockets, such as the professional liability insurance policy and the assets of a firm. Therefore, it’s prudent for design professionals to be proactive in managing risk with respect to potential exposure for damages beyond the property line of the project, especially in dense urban or suburban areas.

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Berkley Design Professional’s 10th Anniversary – Cheers to 10 Years!

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By Larry Moonan
Executive Vice President, Chief Operating Officer, Berkley Design Professional, a Berkley Company

April 17, 2023

April marks the ten-year anniversary of Berkley Design Professional and we couldn’t be more excited! Over the past decade, we have established ourselves as a leader in the A&E marketplace by providing outstanding service to our brokers as well as comprehensive coverage, risk management support and exceptional claims handling for design professionals across the country.

The past ten years have been filled with some challenges and many successes, but throughout it all, our brokers have consistently supported and encouraged us. Our brokers have enabled us to grow and thrive and we are grateful for their unwavering commitment to Berkley Design Professional.

When we first started out, our vision was to create a business that would meet the unique needs of design professionals. Our goal was to provide insurance coverage that was tailored specifically to the risks faced by architects, engineers and other design professionals. Over the years, we have been able to do just that, offering a range of innovative insurance products designed to meet their diverse needs.

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To Sub or Not to Sub

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March 14, 2023

To sub or not to sub, that is the question.

Should a firm retain a subconsultant that flows through them on a project, or should a firm let the owner directly retain the other design professional?

It’s probably not the first time that an architect or engineer has seen this question posed, nor will it be the last.

I raise this question not because it is an exciting topic, but because it is a very relevant claim scenario that I have seen time and time again.

Here are some things to think about:

  • Has your client considered what it would do if its subconsultant stopped responding to phone calls or emails?
  • What would happen if the subconsultant simply shut its doors without notice to your client in the middle of a project?

I know that a firm would not think this scenario would happen to them, especially if the subconsultant is a firm that your client has worked with in the past and has a good relationship with. But it happens.

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What’s in a Name?

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Why names matter on a professional liability insurance policy

By Cindy Russell
Assistant Vice President, Senior Claims Examiner, Berkley Alliance Managers, a Berkley Company

December 8, 2022

Let me introduce myself. My name is Cindy Russell; well, my full name is Cynthia Russell. Maybe you need to know my maiden name was Ellis. Why does all this matter? Depends on what you need it for: looking up my records at the doctor’s office (Cynthia Russell), if I’m calling the financial company that has my IRA (Cynthia Ellis Russell) or social media (Cindy Russell), for example.

For architects and engineers, it matters for insurance coverage, contract considerations and the name by which the public knows them.

A design professional liability insurance policy (and likely other types of policies) provides coverage for a specific firm name or names. If a claim is made against a firm name that’s not included on the insurance policy, coverage may not be provided for that claim.

Sometimes even a small difference has a big effect. For example, John and Julie’s Architectural Group is a Named Insured on a policy but it also uses the legal name of J&J Architectural Group in certain markets or maybe it used that name previously but changed it a couple of years ago. A claim is made against J&J Architectural Group and that claim is based on a project it took on under this alternate name or the prior name. However, this additional name wasn’t provided to the insurance broker (or the insurance company underwriter) so it’s not a Named Insured on the professional liability policy and because of this it may not have coverage for the claim.

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BDP Risk® Delivers Mutually Assured Success

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By Diane Mika
Vice President, Director of Risk Management Education
Berkley Design Professional, a Berkley Company

At its simplest, insurance can be described as “a piece of paper and a promise.” Customers buy a
piece of paper (an insurance policy) and the insurance company promises to pay in the event there
is a claim.

It’s no secret that professional liability claims against architects and engineers can be expensive—both to the insurance company (cost of resolving claims and paying damages) and to the policyholder (paying deductibles). In addition to the hard costs of resolving a claim, design firms must also absorb the soft costs: lost staff time, lost opportunities, diminished relationships and increased future insurance premiums.

Therefore, the key to mutually assured success is mitigating claims. That’s where BDP Risk® comes in!

Our risk management education program provides relevant learning from the practitioner’s perspective coupled with the wisdom of decades of experience in the insurance industry. Based on a solid understanding of what factors and situations lead to claims against architects and engineers, our BDP Risk® training resources, materials and courses are designed to teach effective practices and strategies that can be put to immediate use to help customers avoid risk and reduce the frequency and severity of claims.

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Wherever Your Next Adventure Takes You, Have Peace of Mind with a Run-Off Policy

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By Barbara Block
Assistant Vice President, Senior Underwriter

May 5, 2022

You’ve worked hard for many years. Started your own business. Weren’t sure if you would make it, but you did. And, you fulfilled your dream of being the owner of a design professional firm. Congratulations!

Now the beach – or mountains or lake – summon you. It’s time to relax and enjoy the fruits of your labor with family and friends. Put all the pressure and stress of owning a business behind you. You’ve earned it and deserve it. But there is one more thing that you have to take care of to protect your future – purchase a run-off policy from Berkley Design Professional.

We know, another insurance policy? I thought I was done with that process, you say. Unfortunately, not. You see, even though your firm has closed its doors, you could still be liable for claims alleging wrongful acts for the services provided prior to the closure.

To protect yourself, you should purchase a form of tail coverage. Tail coverage covers incidents (claims) that happened during the time your professional liability policy was active, but were not reported until after the policy expired.

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Per Project Primary Limits Coverage

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

September 9, 2021

Berkley Design Professional has always strived to provide innovative coverages and Per Project Primary Limits is one of those coverages!

We believe this new way to look at and cover A&E professional liability risks can provide significantly increased value for our policyholder’s insurance dollar.

A few years ago we introduced Per Project Primary Limits in many different ways and thought this innovative coverage would become very popular. We were mistaken.

To figure out why we weren’t writing more of this game-changing coverage we contacted a number of our brokers. And the resounding answer–it was too confusing to explain to a client or prospect and they didn’t have the time to explain a coverage they probably would not sell. So, we put our heads together to see if we could provide a simpler way to describe this innovative approach to A&E professional liability insurance coverage. Here’s our updated, simpler explanation.

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You’re Never Alone

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Free Claim Prevention Assistance

By Anthony Andersen
Senior Vice President, Professional Liability Claims Manager | August, 12, 2021

Having a Berkley Architects, Engineers & Consultants Professional Liability Policy means that you’re never truly alone. Even when you’re dealing with a situation that isn’t yet a formal claim, but is giving you an uncomfortable feeling that it may soon become one, Berkley Alliance Managers is here for you!

This post was updated on January 25, 2024. Find it here.

About the Author

Anthony has managed and handled claims for more than 25 years. He brings a wealth of A&E and construction related experience as well as knowledge regarding best practices and risk management. In his role as Professional Liability Claims Manager, Anthony provides managerial oversight to our claims staff. He received his Bachelors of Business Administration from Iona College. Anthony is based in Central Valley, New York.
Contact Anthony at [email protected].

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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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