Bodily Injury Claims: More Shock than Severity

When a claim is brought against an architectural firm alleging that an injury or death was caused by the firm’s negligence, the firm suffers its own kind of trauma. Bodily injury cases invariably cause internal strife and force the firm to question its services. Often, a firm feels singled out for punishment, abused by the legal process, and sullied by the mere allegation. Reputation and productivity are both challenged. However, bodily injury claims, while distressing, are neither common nor costly when measured by insurance payments.

Most Professional Liability Claims Relate to Project Problems

If we look at claims over the last 10 years, over 82% of all claims brought against design firms insured through Victor and CNA alleged property damage or economic loss. In examining the disposition of claims, it is clear that while the number of bodily injury claims brought against design professionals in the Victor and CNA program had an influence on insurance defense costs, and the deleterious effect on the productivity of those firms was significant, few bodily injury claims resulted in any payment more than the expenditure of time and defense costs.

The allegations leveled against an architect related to bodily injury claims 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’s standard documents have removed any reference to supervision and the right to stop the work from the responsibility of the architect, principally because they were not appropriate to the scope of services required. The 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. Such language stating that the contractor is solely responsible for safety programs and procedures—and that the architect has no right to stop the work of the contractor—developed to more clearly align responsibility for safety with the contractor’s authority and control.

Bodily Injury Claims Do Not Drive Insurance Costs

Less than 1% of the money spent by the Victor and CNA program insurance program over the last five years to indemnify or compensate for harm went to injured workers. When a bodily injury claim is made, 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 Victor and CNA program are divided into claims made by injured construction workers and those made by non-workers, a group that comprises mostly users of facilities, but also includes others present during construction. From 2009 through 2018, bodily injury claims from construction workers accounted for 4.3% of all claims. Bodily injury claims from the broad non-workers group accounted for less than 7.5% of claims.

A Claim Brought by a Non-worker Can Be More than a Nuisance

Of all claims that were brought against design firms for injuries to the users of facilities or others who are grouped in the non-worker category, almost 39% resulted in an indemnity payment. During the five-year period, the average paid claim was about $115,000 for defense and indemnity above the deductible obligation of the policyholder.

While routine “slip and fall” cases occurred with greater frequency, the more dramatic cases resulted in higher costs. Over 44% of non-worker bodily injury claims were made against architects, but civil engineers as a specific discipline accounted for about 43% of such claims. Most of the high-cost claims involved highway accidents. Highway accidents often result in serious injuries and may involve sympathetic plaintiffs. In addition, highway projects involve public entity clients, and some jurisdictions enforce the sovereign immunity of the public entity, or they allow suits but limit the amount of damages a municipality may be required to pay. When combined with joint and several liability laws, design firms may find themselves as the sole defendants in lawsuits.

Worker Injury Claims Have Declined, but Still Can Be Costly

The rate for claims from construction workers has historically been less than the frequency of non-worker 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 architect.

In 2016, claims from injured construction workers still accounted for 4.3% of all claims, but only about 6.7% of these claims ended up with an indemnity payment—averaging about $180,000—being made on behalf of the policyholder (many of these claims were dismissed). The cost of these paid claims accounted for less than 1% of the total indemnity payments made in the program. However, the costs of worker injury claims were not always low. Between 2009 and 2018, the average defense and indemnity costs when claims resulted in payments to an injured worker or the estate of a deceased worker were more than $516,000.

Contractor and Practice Cautions Are Appropriate

The appropriate course of action when a clearly unsafe situation is recognized is to address the unsafe condition in routine job site reports and inform the project superintendent or other person who is in control at the site. To alleviate the concern that such an action will be construed as an assumption of responsibility for site safety, the architect should use a standard procedure in the field to record and communicate the architect’s opinion about an unsafe condition. 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. Some defense counsel also suggest including a paragraph reiterating that the architect is not responsible for safety at the site because safety is the sole responsibility of the contractor (or some other party), and that the architect has not inspected the site for safety violations or any other unsafe conditions.

Since architects have no contractual relationship with the plaintiffs who bring non-worker bodily injury claims, these claims generally cannot be avoided through contract language. Usually, the best defense is an aggressive effort to avoid a settlement when there is no liability. Even if the firm is exonerated, however, there are always defense costs to pay.

The risk that architects will face liability for a bodily injury claim depends on the complexity, type, and location of a project. In every situation, however, firms should use protective contract language, procedures, and documentation to minimize exposure.

Victor and CNA work with the AIA Trust to offer AIA members quality risk management coverage through the AIA Trust Professional Liability, Business Owners, and Cyber Liability Insurance Programs to address the challenges that architects face today and in the future. Detailed information about both these programs may be found on the AIA Trust website, www.TheAIATrust.com.