A or F? Do you earn a passing grade when it comes to risk management for land surveyors?

Transcription

1 A or F? Do you earn a passing grade when it comes to risk management for land surveyors?

2 Objectives Gain an understanding of risk factors affecting both professional liability and general liability for land surveyors Review the most common insurance requirements found in commercial contracts today for land surveyors Review and understand key policy basics and exclusions of the professional liability policy Examine claim case studies to develop an understanding of lessons learned

3 Quick Pop Quiz! 25 True/False questions Complete individually Review and discuss as a group

4 #1 Q: All survey firms are required by state mandate to carry professional liability insurance? A: False

5 #2 Q: It is your General Liability policy that pays damages for your professional negligence? A: False

6 #3 Q: Oral agreements are binding? A: True

7 #4 Q: Purchase Order agreements are the preferred contract type by professional liability underwriters? A: False

8 #5 Q: There are only two types of dispute resolution methods: Arbitration and Litigation? A: False

9 #6 Q: Using a Limitation of Liability clause in your contract is not allowed for surveyors? A: False

10 #7 Q: If you have been notified about a potential problem on a project, it is best to wait until formal suit papers are filed to report the matter internally? A: False

11 #8 If you discover hazardous materials at the jobsite, you should call your on-call remediation company to get a quote on cleaning up the site? A: False

12 #9 Q: Third parties can sue surveyors for property damage? A: True

13 #10 Q: You are unable to add your client as an additional insured to your professional liability policy? A: True

14 #11 Q: Most professional liability policies carry a $0 deductible? A:

15 #12 Q: Admitting liability is the first step in resolving disputes and claims. A: False

16 #13 Q: If your survey was performed correctly, you cannot be sued? A: False

17 #14 Q: A Letter of Agreement gives a surveying firm all of the protection needed for a small fee project? A: False

18 #15 Q: Project file documentation is not discoverable in a claim situation? A: False

19 #16 Q: The most common claimant against surveyors is the client? A: True

20 #17 Q: While on the project site, you stumble into a fence knocking a section of it down. As a result, the owner requests you pay for the damages to the fence. This is likely covered by your General Liability policy? A: True

21 #18 Q: Once a professional liability claim is settled, it no longer impacts the firm? A: False

22 #19 Q: As a subconsultant to the Prime Engineer on the project, you never need to review the Prime contract? A: False

23 #20 Q: Current and past employees can be covered under a professional liability policy? A: True

24 #21 Q: If a potential client comes to your office to meet with you and he/she slip and fall on the steps leading up to your office door, your professional liability policy will pay for that individual s medical bills? A: False

25 #22 Q: Your professional liability policy can defend both your firm and your client if the client requests? A: False

26 #23 Q: Implementing a Master Service Agreement is a solution to reducing verbal agreements? A: True

27 #24 Q: Your professional liability policy cannot cover pollution liability and you will need to purchase this coverage separately? A: False

28 #25 Q: Your insurance agent can waive her magic wand and make all of your claims go disappear and so you should take her to lunch as often as possible! A: True

29 Take A Deep Breath!

30 Insurance Requirements What limits is your client requiring? Is there a Time Period requirement? Is there a Pollution Liability requirement? Is there a Notice of Cancelation requirement? Is there a Waiver of Subrogation requirement? Is there an Additional Insured status requirement? What requirements do you sub-consultants need to have?

31 The List Goes On and On Commercial General Liability Business Auto Liability Workers Compensation & Employers Liability Commercial Umbrella Professional Liability Pollution Liability

32 Professional Liability Key Policy Basics Exclusions When I have a claim?

33 Key Policy Basics Claims Made Policy Importance of the Retroactive Date Importance of Named Insureds Definitions

34 Exclusions Warranties or Guarantees

35 Exclusions Claims from Uninsured Sub-consultants Claims related to Fee Disputes

36 Exclusions Copyright Infringement Liquidated Damages Contractual Liability

37 When I have a Claim Defense of Claim Defense counsel shall be designated by the Company Duties of the Insured Promptly forward all documents in connection with the claim Cooperate fully with the Company Shall not voluntarily make any payment, assume or admit liability, settle, or incur any expense, without the prior written consent of the Company

38 Putting it all together!

39 Claim Case #1: An Owner of a local office building in New Jersey hired a surveyor to perform an ALTA survey. The surveyor commonly did business on a hand shake and did so in this case also. He and the owner settled on a price for the survey over the phone and the surveyor went to work. The surveyor researched public records, but never visited the site. The survey missed an easement affecting a drainage pipe and stopping construction of the new office building. The owner demanded $50,000 in damages

40 Claim Case #1: The land surveyor paid his $5,000 deductible The insurance company paid $15,000 in an indemnity payment and $19,587 in defense costs

41 Claim Case #2: ABC Surveying Co (ABC) provided various surveying services for a shopping center expansion, including the staking out of the two new buildings. Shortly after construction began, it was discovered the new structure was incorrectly placed about 30 feet west of where it should have been located. The error would have resulted in the loss of parking spaces for an office supply store and would have created accessibility problems. Footings, foundation walls, and the concrete slab had to be demolished, and the building had to be relocated appropriately. As a result the project owner filed a claim for delays and extras in the amount of $656,000.

42 Claim Case #2: While ABC accepted responsibility for the miscalculation, it also pointed out the drawings provided by the architect were ambiguous and incomplete. According to ABC, the drawings contained only two fixed reference points in lieu of three. To properly place the building, a third point should have been provided. Without the third point for reference, the building could have been placed in more than one location. Thus, the building was misplaced. The architect argued, however, that a third fixed point h ad been given to ABC in a telephone conversation, but the surveyor failed to document the conversation accordingly. ABC had, in fact, failed to document this critical issue, and the information was never transferred to the field.

43 Claim Case #2: After several negotiations, the claim settled with the insurance company paying $362,500 in indemnity and more than $25,00 in defense costs.

44 Lessons Learned Have a signed/written contract Implement and Evaluate Quality Control Procedures Value and Provide Technical Training to Staff Have a Professional Liability policy to stand behind you! Evaluate your client Document, document, document

45 Thank you! Holly Gill Walker & Associates Insurance