The Importance Of A Certificate Of Insurance
As with any profession, architects and engineers can make mistakes. Sometimes this is just an oversight, sometimes it is just a minor error or omission. Regardless of the cause, this is why it is essential that these parties have a Certificate of Insurance.
One of the common beliefs, by both contractors and owners, is that any deviation that caused a loss should be classified under E&O. This is not a reliable assumption. There are always going to be minor errors in any project and this should not be classified as a loss.
Architects and engineers maintain professional liability insurance to cover any possibility that there was a loss or damage because of their negligence. The contract that is signed with the other party or parties often contains other provisions regarding liability.
All liability policies exclude coverage for liability that is assumed by a contract. In other words, they do not assume liability for work that does not meet the contract’s higher standards. There is a fine line here between the contract’s expectations and what would ordinarily be expected.
There have been a number of court cases involving architects and engineers and their supposed negligence in various building projects. A recent US Court of Appeals hearing held that a project owner who sued an architect because his design did not meet accessibility requirements for the disabled could not hold them liable. This prevents project owners from suing a design firm for indemnity who has left out a part of the design which will violate the Americans with Disabilities Act.
Architects and engineers can now be covered by insurance in areas of asbestos, pollution and design/build. Designing a building up to the many codes regarding such things as smoke evacuation and containment, proper fire escapes, ventilation and other requirements is not an easy task. Because project owners are often quick to define common errors as negligence, it is very important to have adequate liability insurance and a Certificate of Insurance on hand.