Source: Berkley Design Professional, https://www.berkleydp.com/

A small civil/survey firm had a master agreement with a municipality to provide on-call engineering services and periodic site inspections. The firm’s individual projects were handled with a purchase order, not a contract. On a road improvement project a motorcyclist was severely injured when the driver lost control and crashed within a construction area. The civil/survey firm did not document its inspections of the area under construction nor did they provide reports to the municipality. Ultimately, Berkley Design Professional paid $200,000 on behalf of the policyholder as part of a $3 million settlement. Additionally, $48,000 was paid in legal expenses. The decision to settle was made to curtail litigation costs and avoid a potentially devasting jury verdict.

Lessons learned:

When performing services on individual projects based on a master service agreement, the design professional should carefully define the scope of services and responsibilities it is undertaking on the specific project and exclude services not provided. Site visits and inspections performed during the construction contract administration phase should be clearly documented and placed in the project record.