What are design firms doing to manage and reduce risks? A recent article in The Zweig Letter, ZweigWhite’s weekly management publication, offers some top mitigation strategies.

In the Jan. 30 article, Timothy Corbett, founder and president of SmartRisk LLC, a firm that provides design and building professionals with industry and firm-specific analysis, along with guidance for achieving successful results for their firm and projects, makes a long list of recommendations and stresses the need for awareness and training on this subject.

“Aside from professional development topics, firms should include training on business practices and risk management,” Corbett said. Also on the list: proper staffing, good project and client selection, clear contracts, quality control, and a high level of communication/documentation.

Michael Welbel, president of M.G. Welbel & Associates, Inc. in Northbrook, Ill., one of the largest liability insurance specialty brokers in the Chicago-area, servicing lawyers, architects, engineers, surveyors and other design professionals, adds that, “It can be difficult to know a good client from a bad one. Some warning signs are: the potential new client fired their previous A/E; or they are a single-purpose developer (e.g., a condo development that wants the lowest-cost project and is not willing to pay a reasonable design fee). As to project type, firms should caution against taking on projects that require a high degree of expertise outside of theirs (e.g., healthcare, multi-family housing, gaming; and prisons/detention facilities).”

While it’s easy to take on unintended liability during the construction phase, Welbel presents the following: “The Kansas City Hyatt collapse. I had experience with a field change agreed to by a young architect who was somewhat pressured to agree to a contractor-requested change while on the job site. This short conversation resulted in the failure of 1,000 linear feet of exterior wall,” he said.

“A/E firms all face potential claims issues during construction,” says Peter Smith, corporate risk manager at Weston & Sampson, a Peabody, Mass.-based engineering and architecture, contract operations and construction firm. “Often, this starts out with some adverse situation that occurs on the jobsite that costs the contractor more money than anticipated, and, regardless of the contract terms, will want to seek relief from the project owner.”

To learn more, visit www.thezweigletter.com.