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

The Failing Foundation

An architect designed a new church building and was also responsible for providing engineering services. There were numerous issues regarding the quality of the construction work—the foundation, in particular. The architect used its standard contract which stated that they would “ensure” contractor performance in accordance with plans and specifications. Additionally, the architect did not have a written contract with its structural engineer nor the geotech firm (which it agreed to retain as a subconsultant), only proposals. As a result, the architect was unable to engage its consultants in dispute resolution. To settle the claim, Berkley Design Professional paid $606,000 on behalf of the policyholder and $70,000 in legal expenses.

Lessons learned:

A design professional should never “ensure” the quality of construction work. That could create an uninsurable warranty of performance of another party—the contractor. It is a best practice that prime consultants have contracts in place with subconsultants including responsibility to indemnify the prime consultant for the negligent performance of subconsultant services. The dispute resolution process and venues for subconsultant agreements should align with the prime agreement.