Design firms can significantly improve their protection from liability by "improving their practice management skills," according to a study by insurance program provider DPIC Companies.
The "Risk Drivers" study examined over 17,000 claims against design firms throughout the '90s and found four major "non-technical factors" that increase the risk of claims. Communication problems contributed to 27% of the claims, project team capability issues contributed to 24%, client selection was a factor in 16%, and contract problems contributed to 14%.
"We found that if you look only at the technical cause of a claim, you miss a valuable loss prevention lesson," says DPIC chief claims officer Steve Mauck. "[I]f the technical cause of a claim is a leaky roof, the loss prevention message is not 'don't design or build roofs.' Rather, the right message might be 'improve client communications, tighten up documentation, and improve construction observation.'"
Mauck says these management issues are "at the heart of most disputes," but the good news is that these factors are controllable by implementing the right management systems.