Four ways to protect profitability

Each year, about one-quarter of all design firms insured by the Victor and CNA professional liability insurance program experience a claim alleging harm from the negligent performance of professional services. Architects accept not only professional exposures but create or accept commercial exposures through the contract language used in every professional services agreement. Client-generated contracts often include onerous cost-recovery provisions that exceed the normal legal liability of firms in their provision of professional services. Use these tips from the AIA Trust to manage professional and contractual exposures:

1. Analyze statistics and trends of claims, including who brings them against architects. It’s vital for firm owners to understand how the US legal system treats professional service firms, including how tort law concepts define the professional standard of care.
2. Consider alternative provisions and actions that architects might take to mitigate both professional and contractual risks. By gaining an understanding of how firm owners and their attorneys attempt to shift unmanageable and uninsurable risks that challenge their professionalism, firm leaders can recognize the business and professional risks generated by onerous contractual provisions and evaluate risks when facing owner-generated provisions.
3. Review your PLI policy regularly. Need one? The AIA Trust has you covered. 
4. Enroll in Protecting Profitability – Managing Professional and Contractual Exposures. This free AIA Trust Week webinar describes the legal basis for professional liability claims and helps firms protect their assets and remain viable by managing their exposures.