Your professional services agreement is an essential tool in managing your exposure to risk. An equitable contract fairly apportions risk, while an onerous contract can shift inordinate—and sometimes uninsurable—liability to you. The terms and conditions of the agreement establish the roles and responsibilities of the design professional and the client. The contract review and negotiation process provide you with an opportunity to set reasonable expectations with your client. And, in the event of a claim or dispute, your contract is the first piece of documentation the claims examiner will request. This workshop reviews the risk management fundamentals that underlie the development of effective contracts, the contract review process, and key clauses that impact your risk exposure.
Learning Objectives:
- Understand the direct and indirect cost of professional liability claims, the two main types of risk design professionals face, the basic model for dealing with risk, and the importance of the standard of care
- Review claims benchmark data regarding the exposure, frequency, and severity of claims by firm size, discipline, client type, and project type
- Walk through the contract lifecycle including client and project selection, the role of your proposal, the review process, the use of an interim agreement, and educating the design team