The importance of risk management in your design firm -
Nobody wants to be involved in a claim, it is stressful and time consuming. The best way to try to elevate claims is to have good risk management practices in place. Risk management happens from the time you sign the contract to finalizing the project.
The first piece of risk management that is vital to your design firm is having a Professional Liability policy in place. The Professional Liability policy is there to defend your firm at the time of the claim but also to provide risk management tools along the way. This includes newsletters, webinars, websites, free pre-claims assistance and contract reviews for insurability.
Contracts are another very important piece. Whether you are using a Professional Association contract, your firms standard contract or a letter agreement it is imperative to have a contract. The contract lays out the terms in which your firm will be working with your client including scope of services, fees, indemnity and payment terms.
It is best to, when you are working on a project, to document everything your firm does. From phone conversations to change orders be sure that your firm has procedures on documenting the day to day activities of the project.
Other risk management tools that are available for your firm are peer reviews, continuing education, quality control procedures and client/project selection process. There are also law firms and risk management companies in the market place that offer detailed risk management resources.
While not guaranteed risk management is the best way to help to try to keep your firm out of a lawsuit. Please contact your PUI Agent for questions and resources of risk management.