Focusing on Quality in Business Can Cut Claims, Designers Advised

by WOHe

Focusing on Quality in Business Can Cut Claims,
Designers Advised


Liability claims against architects and others in the design
profession have risen significantly over the past five years. We
live in an increasingly litigious society, and because of that,
design professionals including those in |the kitchen and bath realm
need to pay more attention than ever to the quality of their
business practices.

That’s the word from the DPIC Companies, a Monterey, CA-based
provider of professional liability insurance programs and risk
management services for architectural firms and related
companies.

According to a recent analysis by DPIC, the increase in claims
against design professionals is largely a reflection of an increase
in professional liability claims overall in the U.S. However,
design firms are often the target of claims even when the specific
problem might have been caused by a subcontractor, according to
DIPC’s chief claims officer Steve Mauck.

“So, in times when claims [in general] are on the increase,
architects [and other design professionals] take a
larger-than-average hit,” he stated.

Mauck believes that the robust economy of the late nineties was
a major contributing factor in the rise in claims activity.

“Since our last study in 1995, the design industry has evolved
in ways that make [design professionals] more vulnerable to
disputes and claims,” he observed.

“The growth in available projects [needing to be done] far
outpaced the growth in the number of firms and the number of
experienced professionals [available to do them]. As resources were
stretched by increased workloads, inexperienced staff was assigned
to tougher challenges, and details were missed,” he further
noted.

Mauck added that the most recent DPIC study revealed that
problems with non-technical aspects of projects such as
communications, client selection and contract negotiations
contributed to the vast majority of claims made.

The findings, according to Mauck, “reinforce our longstanding
belief that paying attention to the quality of business practices
is [another way of] paying attention to loss prevention.

“And, the level of success a firm has with risk management,” he
added, “has a direct bearing on a company’s bottom line.”

So, what’s the best way to avoid ending up in expensive
disputes?

First and foremost is communication. Legal action tends to occur
when communication breaks down.

Addressing problems quickly and in person will help to prevent
things from getting out of control.

Be sure your contract spells out what you are and aren’t
responsible for. Explain your policies to potential clients
verbally, as well as in writing, before the project begins. Don’t
spring surprises on them after the fact.

Take responsibility for getting the job done right. If you
subcontract out work, find reliable subs and stick with them.

Don’t cut corners. Set and maintain high standards for quality
and integrity, and hold your employees to these.

Finally, don’t take on more work than you can handle. Stretching
your resources may seem like a good way to boost your bottom line,
but it can be more expensive in the long run if things go
wrong. 

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