Asbestos Risks During Design Phase
Most professional service agreements assume that the site for a project is “clean” and that no risks from an environmental hazard such as asbestos will affect the project or the design professional’s delivery of services. Asbestos can pose unique liability insurance risks to design professionals in that meritless claims against design professionals may be generated from its presence on a project. In some cases, the design professional is involved on the project to provide services to assist the client in correcting the situation. In other cases, the very existence of asbestos is unknown to the design professional. In either situation, the design professional is not in a position to manage the risks generated by the release, discharge, or dispersal of the material during the construction or reconstruction process or by the actual removal, transportation, or disposal of the material.
The existence of asbestos and any abatement of the hazard presented by the asbestos are the responsibility of the client. If a contractor is engaged for the abatement, it is the duty of the contractor to handle and dispose of the material in an appropriate manner to protect its workers, the site, and those who may be harmed by the contractor’s efforts at the site.
A client should recognize that professional services on a project whenever asbestos occurs or could occur should be afforded special protections so that the design professional can assist the client in solving the client’s problem by providing your services in a problem area. Although the likelihood of culpability is very low, the threat of third-party suits is also very real in an asbestos abatement situation. The design firm’s costs in defending itself against environmental claims could be significant in terms of expenditures of time and money. A firm’s best preparation, therefore, would be to generally allocate the risk and costs of any such claims against it equitably to the parties that control the abatement process.
An example of an indemnification provision from the client that would cover the pollution risks is as follows:
To the fullest extent permitted by law, Client shall indemnify and hold harmless Design Professional, its employees and agents, from and against all claims, losses, damages, and costs (including but not limited to court or other dispute resolution costs, and the time of Design Professional expended in defense of such claims) caused by, arising out of or relating to the presence, discharge, dispersal, release, or escape of asbestos at, on, under or from the Project site.
If you would like to discuss how to mitigate your risks, please call your Professional Underwriters agent today.