Architecture Firms Should Not Fear Bodily Injury Claims A firm suffers its own trauma when a claim is made alleging that an injury or death was caused by the firm’s negligence. Bodily injury cases invariably cause internal strife and force firms to question their services. Often firms feel singled out for punishment, abused by the legal process, or sullied by the mere allegation. Reputations and productivity both are challenged by injury or death claims. But bodily injury claims, while distressing, are neither common nor costly when measured by insurance payments. Over 90 percent of all claims brought against architecture firms insured through The AIA Trust’s program with Schinnerer and CNA allege property damage or economic loss. Few involve bodily injury, and, of these, only about a third of the claims involve an injured worker. In examining the disposition of claims, it is clear that while bodily injury claims brought against architects have an influence on insurance defense costs, and the deleterious effect on the productivity of those firms is very significant, few bodily injury claims result in payment beyond the expenditure of time and defense costs. In some instances, however, the resolution may involve either a payment to “make the claim go away” or a significant payment in a serious injury or death case. Bodily injury claims against firms in the Schinnerer and CNA program are divided into claims made by injured construction workers and those made by nonworkers, a group comprising mostly users of facilities but also including others present during construction. Nonworker Claims Can Be Costly Of the 4.6 percent of all claims that are brought against architecture firms for injuries in the nonworker category, about 26 percent result in an indemnity payment. From 2000 through 2004, the average paid claim was less than $120,000 for defense and indemnity. About 43 percent of nonworker bodily injury claims were made against architects, mostly involving multiple defendants. Often a project client or other party in control of the site may be at fault. But under the joint and several liability laws in many states, architecture firms may find themselves as the sole defendants in lawsuits. In egregious cases, such as when a person is grievously injured and requires long-term care, even if multiple defendants are held partially responsible, the fault attributable to negligent design may end up with a significant settlement cost or judgment. Worker Injury Claims Have Declined The rate for claims from construction workers has historically been less than the frequency of nonworker claims, and the rate has been declining since the 1960s. While part of this decline can be attributed to changes in state laws, the lower rate and trend to fewer claims may be the result of contractual language that places responsibility for job site safety with the contractor and not the design professional since it is the contractor who has control of the site and the workforce. Contractual Protections Are Essential
The standard documents published by The American Institute of Architects, as well as many other consensus or form contracts state that the contractor is solely responsible for safety programs and procedures—and that the design firm has no right to stop the work of the contractor. Vic Schinnerer, then president of Schinnerer, worked with the committees developing the document language to insulate the design firm from misplaced claims. However, since design firms have no contractual relationship with the plaintiffs who bring nonworker bodily injury claims, these claims generally cannot be avoided through contract language. While some claims can be shifted to the client through contractual defense and indemnification commitments, such protection is often illusory. Usually the best defense is an aggressive effort to avoid a settlement when there is no liability. Although even if the firm is exonerated, there are always defense costs to pay. Injured Worker Claims’ Effect on Insurance Costs Is Minimal Claims from injured construction workers still account for 2.5 percent of all claims, but only 20 percent of these claims end up with an indemnity payment being made by the CNA program on behalf of the policyholder. Even though a few claims result in costly settlements or judgments, many of the claims are dismissed. The cost of these paid claims, which are only .5 percent of all the claims brought against CNA-insured design firms, account for only 1.5 percent of the total indemnity payments made in the program. Between 2000 and 2004, the average defense and indemnity cost when a claim results in a payment to the injured worker or the estate of a deceased construction worker was less than $100,000. The frequency and cost of these claims is even lower in states where “umbrella” workers compensation laws extend protection to design firms as well as to the actual employers of construction workers. Mitigating the Exposure to Worker Injury Claims The exposure of architecture firms to liability for the death of or injury to construction workers is rooted in workers compensation laws. Since an injured worker is precluded in most situations from suing his employer, there is an inherent incentive to find someone else who is or may be liable for all or part of the harm. On a construction site, that someone is frequently the architect. The allegations leveled against the architecture firm usually have one or more of the following assertions: negligent design; failure to “supervise;” or failure to “stop the work.” It is important to note that the AIA documents state explicitly that the architect shall not be responsible for safety precautions and programs in connection with the work, since these are solely the contractor’s responsibility under the contract for construction. A court, however, may find that an architect’s duties are not defined solely by contract and that the responsibility for site safety cannot simply be eliminated by contract. Often, the actual knowledge of the risk of harm is significant in determining the fairness in imposing a duty of care. The appropriate course of action is to address the problem of actual knowledge of an unsafe condition in routine jobsite reports and inform the project superintendent or other person who is in control at the site. At a minimum, a report should include the date that perceived unsafe conditions were observed and the name and position of the person to whom notice was given.
If the observed condition is critical or recurring, could result in a threat to the safety of areas adjacent to the construction site, or indicates an inability of the contractor to meet contractual or legal requirements, it should be reported to the client (who retains the power to stop the work) and perhaps to government officials. If the danger is immediate, prudence requires immediate action. Courts have held that an immediate response to an apparent danger does not create a duty to further monitor the situation, to examine other areas for dangerous conditions, or to assume the duty contractually placed on the construction contractor to provide a safe site. While architecture firms should be prudent in training staff to provide field services such as the evaluation of the work of the contractor, they should not fear worker injury claims. They are not common and usually defensible. Providing on-site services on behalf of a client is still one of the best ways to mitigate professional liability exposure. And while nonworker bodily injury claims may involve firms inappropriately in the legal process, the reasonable efforts of architects to protect public safety through their designs usually is adequate and appropriate to keep the architecture firm from suffering losses. By relying on AIA contract language and practicing within the standard of care, firms can provide professional services without bodily injury claims adversely affecting their productivity, practice goals or profit.