A&E market evolving with changes in the economy
Architecture & Engineering is an $11 billion industry, yet the majority of A&E firms (approximately 87 percent) generate $1.5 million or less in annual revenue. As a record number of closures and layoffs are announced at large firms nationwide, many professional architects and engineers are forming small consultancies or pursuing work as independent consultants. As the number of firms with this small business model has increased, new risks have emerged particular to the field. Architects and engineers often encounter unexpected problems that can lead to major expenses for clients and possible lawsuits—even if the problem occurred at no fault of their own. As a response to the unique risks these firms face, a specialized insurance program is recommended. Aspire A&E from Stuckey & Company is a professional liability program specifically designed for smaller A&E firms. Aspire protects beyond a basic errors & omissions policy, and offer customized solutions for this unique segment of the industry.
Passing the buck
Professional liability insurance was created for architects and engineers in 1957 by Victor O. Schinnerer. Before then, architects were not viable targets for claims. Today, contractors and consumers are quick to point the finger at architects, alleging negligence or failure to perform services. Consider this real-life loss scenario in which the negligence, and therefore the costs, are passed along the multi-party chain to the designer:
An architect was retained to design a new performing arts center. To cut costs, the city took over construction administration. Some of the finish work in the auditorium included installation of veneer core modesty panels for the front row of the balcony. After completion of the project, one of these modesty panels fell upon a patron as a result of a child kicking the panel during an event. Suit was brought against the city and the city filed a third party complaint against the architect.
This type of scenario can occur with almost any project. In addition to costs brought on by injuries or negligence, A&E professionals must consider fluctuating variable fuel, material, and technology costs, making professional liability not only a necessity, but a vital business strategy.
Nobody’s perfect
The definition of “standard of care” maintains that people are not perfect, and an architect or engineer is no exception. In fact, the Guide for Amendments to Owner-Architect Agreements emphasizes that “The law… does not expect architects to provide perfect or flawless services or to guarantee or warrant the results of their services.” However, agents should caution their clients when using phrases such as “best,” “superior” or “most qualified,” as it may create unattainable expectations. The reality is that something is bound to happen differently than planned. If your clients project themselves as honest yet imperfect professionals who equip themselves with the appropriate coverage, consumers may be more understanding when it comes to pointing the finger.
Why choose Aspire A&E from Stuckey & Company?
The A&E Underwriters at Stuckey & Company have expert knowledge in the field and a technical background that allows them to speak the same language with regard to your client’s business, their specific needs and the specialized coverages available for small A&E firms. You can trust that the Stuckey team carefully listens to you and your client, and serves as sage, empathetic counsel.
Stuckey can easily extend coverage to other specialized areas. For example, engineers who specialize in technology may require additional tech-specific insurance. By working with Stuckey & Company, you have access to other specialized coverages. Your client can trust they are getting the most comprehensive and customized insurance available.
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Most importantly, you and your Aspire A&E clients can rely on Stuckey & Company for competitive pricing and high-quality service. The A&E industry has changed significantly over the past several decades, and today, plans and documents are scrutinized in great detail to prevent unnecessary mistakes or costly lawsuits. This increased focus on managing risk among A&E firms has created a significant demand in the insurance market. A&E clients have choices when it comes to insurance coverage. When you choose Stuckey & Company, you are choosing the best value with superior service.
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The last half-century has brought significant changes to the way architects and engineers conduct their business and protect their risks. The economic climate may improve, and industry methods of documenting and covering tracks may reduce risk, but mistakes are inevitable. As a trusted insurance agent, you can arm your A&E clients with the most comprehensive insurance on the market. Today’s architects and engineers are held to high standards of performance. Offer them professional liability insurance that lives up to those standards.
For more information about the Aspire A&E program from Stuckey & Company, click here.
Consider how many people have the same (or similar) names. John E. Smith might get incorrectly coded for John A. Smith. With medical billers handling hundreds of files each day, the opportunity for human error is quite large. This translates into a large change opportunity for a loss.
