Many design professionals, regardless of their specialty, tend to believe they will avoid a professional liability claim or dispute as long as they offer great design that appeals to the eye and/or solves a particular problem, but that's only half the story.

Not all risk can be eliminated, of course, but much of it can be managed. The first step toward managing risk is by gaining an understanding of the root causes of many of the professional liability claims. XL Group's Design Professional team has been studying and classifying the root causes of professional liability claims against design professionals, including landscape architects, for over 20 years. And while it's true that most professional liability claims are triggered by design error, our deeper investigation has found the failure or absence of a business or project management practice is what really lays the groundwork for such a claim to occur.

Our research indicates the underlying causes of claims or disputes against design professionals originate within four practice management areas: negotiation and contracts, client selection, project team capabilities and communication. Because breakdowns in these practice areas result in 90 percent of professional liability claims, landscape architects need to understand how paying careful attention to these practices can help improve a firm's risk profile.

Negotiation and Contracts
The seven percent decrease in claims attributed to negotiations and contracts from 2001 to 2009 is a positive trend, but the cost to settle those claims has risen dramatically. The issues that led to 66 percent of the claims attributed to this risk driver included unclear or inappropriate scope of services, ineffective pre-project evaluation and lack of a signed contract when the work began.

You must clearly define the services you are providing, the services you won't, and the services you'll provide for an additional fee. The scope of services should also be written in plain English, without design jargon. Before you finalize the proposal ask, "Where can we get snake bit on this project?" Residential projects, the riskiest of all, may justify a limitation of liability provision in the contract. If the project involves new or unproven technologies, "innovative design" provision in the agreement should acknowledge those risks, and state whose responsibility they are.

This graph compares the percentage of claims in the four most common risk factors for 2001 vs 2009. Claims related to "communication" had the largest rise of the risk factors. Over 90 percent of the claims attributable to communication is a firm's lack of a process to identify errors or conflicts, inability to effectively handle disputes, failure to explain the scope of service to the client and the absence of documentation regarding changes. The decrease in claims for "negotiations and contracts" (left column) is a good thing, but the cost to settle these claims has risen dramatically since 2001.

Client Selection
When a design professional is sued, 70 percent of the time it's the client that initiates the suit. The major factor is the client's level of experience in design and construction. Does the client understand the realities of design, including the fact that construction documents will not be perfect? Your services have to meet a standard of care; many clients do not understand this concept. If you're working for another design professional, he/she should be willing to advocate on your behalf for an adequate scope of services that includes construction contract administration. Identifying these and other client-related issues upfront can help you plan you response if a problem arises.

Project Team Capabilities
Inexperience of the project manager, design staff and those who conduct site visits lead to 89 percent of the claims attributed to this risk driver. Landscape architects need to closely align the skills and capabilities of their staff to the needs of each project. If a project involves complex piping, for example, you'd better have someone with experience and expertise in this area. When selecting staff to conduct site visits, choose those knowledgeable about the project requirements and scope. They should be savvy enough to respond to a contractor who says the installed work meets the design, when in fact it does not.

Communication
Over 90 percent of the claims attributable to this risk driver result from the lack of a procedure to identify errors or conflicts, inability to effectively handle disputes, failure to explain the scope of service to the client and the absence of documenting changes. Since many of these issues surface during construction, having the right people on site and offering construction contract administration can help you address disputes.

Managing Risk and Preventing Loss
Our research finds that one of the best ways to avoid claims, no matter the risk factor, is handling disputes and disagreements as they arise, rather than waiting to see if they "come to anything." Firms are encouraged to involve their agent/carrier at the first sign of a problem or issue. If a landscape architect suddenly finds the client isn't responding to calls or emails, your agent can advise you, and, if necessary, get directly involved to help deal with the source of the client's dissatisfaction. Most often we're able to preserve the relationship with the client.

Our decades-long experience with claims against design professionals shows the best way to manage risk is through staff training. Our insureds have access to onsite and online training in these and other risk management topics, which we've developed based on our claims data.