Designing for the Future: Exploring How Professional Liability Policies Impact the World of Engineering

Part Two

In Part One of this Engineers Week article series, we focused on exploring how professional liability (PL) and owner’s protective professional indemnity (OPPI) policies can impact coverage for the insured. The following examples illustrate how such professional liability exposures can arise.

There are multiple settings where design errors can occur. The consequences are not only severe; there is also a lot of variability. The first example illustrates how the construction of a college football stadium led to significant lawsuits and problems. These types of issues can occur very frequently when companies are trying to fix an issue that resulted from an initial design error. The second example conveys the consequences of a miscalculation and notes the amount of money that can be in dispute over a simple mistake. Lastly, the third example illustrates a building collapsing in Surfside Florida due to the alleged negligence of the engineers and design teams involved. As shown, each example is its own building type, presenting different issues arising from engineers and design team mistakes.

  1. University of Central Florida Board of Trustees et al. v. Wharton Smith Inc et al.

Design errors at the outset of a project can lead to issues compounding over time. Working off an initial design error only increases the potential liability and severity that could arise. Essentially, it creates problems for those who are trying to fix the error after the fact. Once there is a problem from the start, it is inevitable that outside exposure will exacerbate the issue, resulting in injury and liability. Securing and executing a contract for a football stadium is an enormous endeavor, even for an engineer. A project like this takes significant investment, time, and energy to ensure that the specifics of the design are correct. However, even with valiant effort and other appropriate measures taken, there can still be a miscalculation, resulting in an engineer’s worst nightmare. In 2017, the University of Central Florida’s (“UCF) football stadium received the nickname “The Bounce house” after costly mistakes were made. The contractors and engineers who oversaw the development of the stadium were allegedly the cause of a premature wearing of the steel, resulting in more than 1,600 corrosive areas. The ten-year-old Spectrum Stadium now already contains rust on the steel beams, and degradation in certain locations. According to Sports Business Journal, the rust has affected the structural integrity of more than 80,000 square feet of the stadium. In order to resolve this issue, UCF settled for 1.4 million dollars to resolve the lawsuit.

  1. Merrill Iron & Steel v. Blaine Construction Corporation

A 2017 Pennsylvania case, Merrill Iron & Steel, Inc. v. Blaine Construction Corporation, involved the construction of a wastewater treatment facility. An engineering firm and subcontractors made substantial design calculation changes to the model that was originally provided, resulting in professional liability claims against the firm for five million dollars. The fabrication of the designs, along with the substantial changes resulted in allegations that the firm was not properly providing Building Information Modeling (“BIM”) services. BIM services are those that provide a digital representation of the project. These models include the design of the building along with the construction and the planning of the project.

  1. In re: Champlain Towers South Collapse Litigation

Another significant and tragic accident occurred in 2021 when one of the buildings in the Surfside Condominiums collapsed, resulting in death or severe injury. It was alleged that the engineers who were involved were negligent. More specifically, it was argued that the professional engineers failed to utilize due care. Supposedly, the engineers from Morabito Consultants found extensive damage to the condominium but did not warn of potential imminent danger.

Additionally, although the engineers in this example had a role in the collapse, the design team was also to blame. According to the New York Times, the foundation of the building along with an underground garage is the basis for scrutinizing the design. The foundation itself had issues involving water intrusion, and the underground parking garage had cracks and crumbling of the supports that were put in place. The New York Times also points out that there was a “severe strength deficiency” in the pool deck due to the design’s failure to comply with building codes. This disaster resulted in a settlement for one billion dollars between the families of the victims and the companies contributing to the collapse, according to CNN. Also, as reported by NPR in 2023, there are plans to construct a new building on that very site. However, family members of those individuals who died as a result of the building collapse were unhappy about the announcement of this potential new development.

Events like these do occur and are a result of the loss of money and lives. At the end of the day, engineers, contractors, and design teams are all humans, they make mistakes. It is, therefore, imperative that when a mistake does occur, there are policies, such as PL or OPPI, that are secured to help mitigate the many and varying consequences that may arise from a mistake. There are many complexities to such coverage options, so it’s necessary to fully explore the options available to your unique situation as a means to mitigate risk exposure.

By: Camee Hughes, In-House Legal Extern for Synapse Partners LLC

Synapse Services offers insurance coverage options for an expansive number of industries. Please contact one of our producers if you are interested in receiving additional information about the availability of insurance options specifically tailored to your industry.

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