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Designers should document expectations to cut E&O risks

Architects and engineers

As demand for green buildings continues to grow, design professionals should have contracts and documents in place that clearly define the scope of their services, industry experts say. 

Design professionals should document their communications with clients to clearly establish expectations as to what they are and are not going to do related to a green building project, said Yvonne Castillo, director of risk management at Victor Insurance Managers LLC, a Marsh LLC unit in Bethesda, Maryland. 

“What is your responsibility versus the contractors’ responsibility, particularly when you think about the physical risks of climate change?” Ms. Castillo said.

For example, clients might assume that design professionals are building in data based on future climate projections, she said. 

“That may not yet be the case for many firms, so document and have communications about that particular project site, what those perils and risks might be as relates to weather conditions 10, 15, 50 years down the road,” she said.

Design professionals should also stay up to date on new materials, technologies and codes, and avoid contractual requirements to provide performance guarantees, said Doug Strong, Exton, Pennsylvania-based head of design professional at Axa XL, a unit of Axa SA.

“They can warrant their professional services, but they really can’t guarantee necessarily the performance of the building,” Mr. Strong said.

The same holds true for so-called green certifications and meeting a certain level of efficiency, he said. 

Reviewing contractual obligations with insurers and general counsel can help design professionals ensure that they’re not expanding their standard of care regarding the design of resilient and sustainable buildings, he said.

Dennis Artese, a shareholder in the New York office of Anderson Kill P.C., said the proliferation of green buildings may result in additional errors and omissions claims arising out of faulty or defective design of the buildings. 

“Architects and engineers are now called to have very specific designs that meet various LEED certifications,” Mr. Artese said.

A building that is designed appropriately and functions properly but doesn’t meet thresholds to earn a specific certification could result in E&O claims, he said.

In addition, in green building construction, the effectiveness of new materials and techniques is an issue that can generate litigation, if some of the materials don’t last as long as expected or perform as well, said Carol Sigmond, New York-based partner at Greenspoon Marder LLP.