6 Professional Liability Risks Architects and Engineers Face in Joint Ventures

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By Lisa MacKay, Assistant Vice President, Senior Claims Examiner, Berkley Alliance Managers, a Berkley Company

September 10, 2026

The architecture, engineering, and construction (AEC) industry continues to evolve, joint ventures (JVs) have become an increasingly popular strategy for pursuing large-scale, complex projects. While JVs offer opportunities for collaboration, resource sharing and market expansion, they also introduce unique professional liability risks that design professionals must carefully manage.

What Is a Joint Venture?

A joint venture is a formal partnership between two or more entities that agree to share resources, responsibilities and profits for a specific project or business purpose. In the AEC context, JVs often involve design firms teaming up to pursue a high-profile project, meet client demands, expand geographic reach or combine specialized expertise.

Key Professional Liability Risks in Joint Ventures

1. Shared Liability Exposure
In a JV, liability is joint and several, meaning each party can be held fully responsible for the actions of the other. This can result in one firm bearing the brunt of a claim, even if its role in the alleged error or omission was minimal.

Risk Tip: Carefully draft the JV agreement to clearly define roles, responsibilities and indemnification provisions to allocate risk appropriately.

2. Ambiguity in Scope and Standard of Care
When multiple firms collaborate, differences in internal standards, Quality Assurance/Quality Control procedures, and documentation practices can lead to inconsistencies. These discrepancies may complicate the defense of a professional liability claim.

Risk Tip: Establish unified protocols for design review, quality management, documentation, and communication to consistently fulfill standard of care obligations.

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Controlling Outcomes and Preserving Relationships Through the Mediation Process

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

June 21, 2024

Controlling Outcomes and Preserving Relationships Through the Mediation Process

As claims handlers, we always look for reasonable opportunities to resolve our claims. Mediation is the most common and beneficial pathway to claims resolution. Most professional liability policies offer incentives for insureds to attend mediation and resolve their disputes. Moreover, mediation provides a means to foster and preserve relationships with insured clients. There are occasions when we can socialize, share some ideas, interact and even find common ground with other insurance professionals as well as attorneys. This ability to connect with others and with the help of a neutral third party or mediator, gives us some control over the outcome of a case and avoids the unknown risk of a decision being rendered by a judge or jury.

With social inflation on the rise and sometimes resulting in extreme jury awards, resolution through mediation is the best way to take the uncertainty and risk of the outcome out of the hands of the judge or jury. The interactive process promotes a free flow of information and allows parties to identify and discuss the strengths and weaknesses of the case in a confidential setting. The mediator assists the parties in exploring legal issues and in evaluating the recoverability of certain damage items that may not have been discussed. An effective mediator also helps to narrow the gap between alleged damages, which are sometimes overstated, and what would ultimately be recoverable to move the parties closer together and to assist them with becoming better informed to evaluate risk and exposure.

For many people, whether the case involves a personal or professional matter, having a dispute that rises to the level of a claim whether litigated or not, is a new and unfamiliar experience, and often “uncharted territory.” The claim and litigation process can be intimidating, uncomfortable, frustrating and disappointing. This experience is also true in mediation. For example in negotiations, unreasonable opening offers can lead to frustration and irritation and cause parties to become more entrenched and unwilling to concede their position. It is not a natural process to most and there is a lot of gamesmanship and strategy on all sides. We often have preliminary conversations with our insured clients and counsel to set the tone and keep an open mind as we prepare ourselves for unrealistic opening demands. The valuation of a case or position becomes more realistic after discussions or back-and-forth offers are made in mediation. The process itself may take more than one session, especially if the parties are entrenched, to allow them time to process the information and better evaluate risk and exposure.

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