Coming to an Agreement

Engineering Inc. magazine

Are Engineers Overworked? Timelines Too Tight? Firms See an Increase in PLI Claims – But Most Are Resolved Out of Court

There’s no doubt about it: Engineering firms are seeing an increase in professional liability insurance (PLI) claims. But the vast majority of these are resolved through negotiation and mediation. Technical errors and omissions are a significant driver of claims, as are communica­tion breakdowns. And many firms over the past year have turned down work due to possible risk issues.

These are some of the key findings of ACEC’s 2024 PLI Survey of Member Firms for Fiscal Year 2023.

CLAIMS ON THE RISE

Firms face a growing issue: “The 2024 survey results show that the number of claims increased for over one-third of respon­dents, while the number of claims decreased in only 1 in 8 respondents. This is a concern,” says Timothy Haener, chairman and corporate risk manager at J-U-B Engineers Inc. and vice chair of the ACEC Risk Management Committee.

“One conclusion may be that increased volumes of work and tight deadlines are putting pressure on staffs, resulting in more claims frequency,” Haener says.

In response, J-U-B is reemphasizing a focus on quality assur­ance and quality control. The good news, though, Haener says, is that the survey results show that claims are resolved out of court 97 percent of the time, with more than half resolved through negotiation and another quarter through mediation.

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