Professional Liability/Risk Management Brief: Certifications
By Richard B. Garber, Vice President A/E/C Risk Management Services, Victor O. Schinnerer & Company Inc.
In legal terms, a certification is a formal assertion, in writing, of some fact. The client, the client’s lender, or a government agency requests a certification as assurance that some aspect of the project has been completed as promised in the contract for professional services or as required by law. Depending on the wording, the certification could establish a warranty or guarantee, and this can increase the professional’s exposure to claims. By signing an unqualified certification, professionals may assume a level of liability that is both beyond the standard of care required under law and the coverage afforded by professional liability insurance.
Avoiding Warranties and Guarantees
While it is possible to rewrite certification language to reflect an expression of professional opinion regarding those facts or findings that are the subject of the certification, this is often not accomplished by the professional. Thus, the certification may establish a warranty or guarantee, which is excluded from insurance coverage.
If the conditions of a certification are not precisely as certified, liability may result regardless of whether or not there was negligence on the part of the professional. The main points that should be considered in every instance before signing a certification are the following:
Based on the scope of services provided, the professional can only certify conditions that are within the direct knowledge or control of the professional.
Any additional services or tests by the professional necessary to certify a specific fact need to be compensated for by the client.
The language of the certification should be properly qualified. If the certification is not based on facts, it should be stated as an expression of professional opinion based on knowledge, information, and belief. This can prevent the certification from establishing a warranty or guarantee.
The certification language needs to be crafted in such a way as to avoid the possibility of a claim of detrimental reliance by a third party. The client or another party specifically identified in the certification should be the only parties entitled to rely on the certification.
The certification should be identified as to the specific purpose, applicable time and date, and recipient. Improper identification of the recipient could lead to third party claims.
Identifying Unqualified Certifications
Construction-related professionals need to carefully read the language of a certification to avoid unintended liability. A certification to avoid would contain language similar to the following:
Intending to be legally bound hereby, the professional hereby covenants, represents and warrants, and agrees as follows…
Such language could be construed by the courts, and a professional’s insurance carrier, as being an uninsurable warranty or guarantee, leaving little recourse for the professional’s defense.
Qualifying Your Certifications
Careful attention to the language of a certification and the ability to provide the client with realistic limitations of that certification constitute prudent risk management. This allows the firm to better predict the costs and consequences of performing professional services. An example of a certification with appropriate qualifying language is as follows:
In my professional opinion, and based on [my observations] or [my scope of services], I hereby certify that…
As always, remain diligent in reviewing a certification to avoid language that may exceed the legal standard of care or the scope of professional liability insurance coverage.
Victor O. Schinnerer & Company Inc. is managing underwriter for the CNA/Schinnerer Professional Liability Insurance Program, commended by NSPE-PEPP since 1957.
Top 10 Web Site Mistakes
Herbert M. Cannon, President of AEC Management Solutions Inc.
10. Not Establishing Your Company as the Expert
Your Web site must establish your company as an expert in meeting the clients' needs. If you don't establish your expertise, what is the point of your Web site?
9. Google Rankings
Do you really think that someone will choose an architect or engineer using a keyword search on Google? They may try to find a specific company, but almost certainly not by using keywords like "structural engineers." Concentrate your efforts on providing valuable content — not keywords.
8. Broken Links
Check every link on your Web site at least once a week. Broken links detract from the otherwise valuable content on your Web site and discourage potential employees or clients.
7. Under Construction
Please don't use the "under construction" sign. You are far better off removing the link until the content is loaded.
6. Out-of-Date News
If your most recent news is from November 2004, you have a problem. There is either no news or you are too lazy to update your Web site. In either case you are sending the wrong message.
5. Out-of-Date Press Releases
If you are committed to having a press release section, please make sure you have at least one per month. Also make sure that the most recent press release is listed first.
4. Not Focusing on the Client
Too many companies fall into the trap of designing their Web sites to impress their competitors. Most clients care little abour your "design philosophy" or your company for that matter and they care even less about your employees. They care about themselves.
3. Your Company Name Is Not on the Home Page
This is hard to believe — but it is true.
2. Hide and Seek Links
I absolutely hate those sites that have hidden links that only popup when you accidentally scroll over it with your mouse. Aside from being a lame attempt to be clever, these companies are losing credibility because of it.
1a. Thinking Your Flash Intro Graphics Impress Anyone
They do not impress potential clients. They annoy them. If annoying potential clients is your goal, this is on of the best ways to succeed.
1b. Contact Links that Dump to an Automatic E-Mail Inquiry
I really just wanted your phone number to call you about a potential project. Why are you forcing me to send an e-mail?
Herbert M. Cannon, president of AEC Management Solutions Inc. and publisher of AEC Managing Partner Newsletter, is a management consultant, seminar provider, and speaker exclusive to the A/E industry. He is available to speak at company meetings and conferences. For more information, contact Herb via e-mail, or visit his Web site.
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NSPE Education for You and Your Firm
NSPE ETHICS FORUM: Public Safety - Public Welfare
Session 2: April 16, 12:30–1:30 p.m. (E.D.T.) 1.5 PDHs
Session 3: May 14, 12:30–1:30 p.m. (E.D.T.) 1.5 PDHs
Forum Series Registration: NSPE & SAME members: $119.00 each session/Nonmembers: $149.00 each session. Click here for the registration form (Microsoft Word document)
Construction Claims Roadmap to BIM 2008 Audioconferences
BIM Risk Factors: Divergent Views of Risks by Owners, Designers and Contractors; Determining Where The Risks Are, Contract Language Considerations and Adapting BIM to Current Contract Delivery Methods. BIM has the potential to reduce risks and costs throughout the entire facility life cycle; this session will discuss how the owner, A/E, and contractor currently perceive shifts in responsibilities, risks, and costs.
Special NSPE member prices:
$149 a site each session
$193 for session plus CD
$171 for CD only
$596 for a CD of all 5 sessions
PDH certificates will be sent on request. Click here for more information and to register. For more information contact Patti Wysocki.
NSPE Interest Group Web Seminars
Building Positive Work Environments
April 8 1:30-3:00 p.m. (EDT) 1.5 PDHs
Construction Defects Part I
April 15, 1:30–3:00 p.m. (E.D.T.) 1.5 PDHs
Integrated Project Delivery & BIM
April 17, 1:30–3:00 p.m. (E.D.T.) 1.5 PDHs
Process Safety Management - A Process Engineer's Role on How to Avoid Catastrophe
April 22, 1:30–3:00 p.m. (E.D.T.) 1.5 PDHs
Knowledge Management Fundamentals and Strategies
April 29, 1:30–3:00 p.m. (E.D.T.) 1.5 PDHs
Construction Phase Risk Management
April 30, 1:30–3:00 p.m. (E.D.T.) 1.5 PDHs
Concepts in Risk Management
May 8, 1:30–3:00 p.m. (E.D.T.) 1.5 PDHs
Construction Defects Part II
May 13, 1:30–3:00 p.m. (E.D.T.) 1.5 PDHs
Click here for more information on each session or to register.
June 12-14, Alexandria, VA
2008 PEPP CFO Roundtable
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PEPP Awards Deadlines
The PEPP Award is given annually to an individual who has made an outstanding contribution to the advancement and recognition of the role of private practice in serving the public interest. All nominations are due by April 30.
PEPP Professional Development Award
The PEPP Professional Development Award is presented to employers who exhibit exceptional career development initiatives and employment practices that advance the engineering professions. Nominations are due by April 30.
The ACEC-NSPE QBS Award recognizes public agencies and private sector entities that make exemplary use of the QBS selection process at the state and local level. Deadline for nominations is April 30.
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Recently Overheard in HR
HR Directors’ discussions
As the sold-out NSPE Human Resource Directors’ Roundtable approaches, PEPP Talk will be focusing on HR-related topics of interest. Recently asked on the NSPE-PEPP HR Directors’ Roundtable listserv was the following:
“I have been asked by my IT Department to ask if anyone else has had any experience with Internet radio creating a problem with slowing down the Internet connections in your firms. We have always allowed people to listen to Internet radio during the day and recently performed a test to see how much faster our connections would be if we blocked it and the results were tremendous, although the employees are not happy with it. Just curious if anyone else has any similar experiences and how you have handled it.”
The responses overwhelming showed that most firms have banned Internet radio. The topic also brought up the more general issue of video/audio streaming through the network. Some firms have effectively banned any streaming media because it eats up huge chunks of bandwidth. A T1 allows for 1544 kilobits per second of transfer speed. Most Internet radio stations provide music at 32–64 kilobits. At an average of 48 kilobits per second, it would only take 32 users to maximize all of the bandwidth. This would not leave room for accessing external Web pages, customers accessing the company Website and ftp site, accessing the network for remote offices, or any other uses of the Internet.
One firm found that employees streaming audio/video and YouTube, along with some other applications, were reducing the bandwidth available by almost 30%. They asked all employees to discontinue their use of all nonbusiness-related Web access applications during business hours. In the meantime, they are looking to acquire software to block these sites (some sites, like Myspace.com, are infamous bandwidth hogs), but will not block access to the Internet. “Our position is that [employees] shouldn’t be on these sites during work hours in the first place.” Another firm monitors who’s using the Internet radio and has the office manager tell them to stop connecting. “It’s been effective in cutting down on people accessing or taking up space.”
Most employees hated these policies when first implemented, as can be expected. Communication is key to overcoming any discord. Communicating that the ban really makes their work go much faster than pulling up, saving, or working on files in the network environment was key to many firms dealing with employee morale. One IT director uses a picture of a pipe with information/water/material flowing through it as an example and introduces the streaming from the Internet radio connection, showing the pipe getting plugged up and less information being able to pass through. Many firms do allow staff to listen to MP3 players and CDs on their computers, which eased the restriction.
Another helpful point for users to understand is the cost of Internet access for the firm. Most users do not understand the need for concern when personal Internet access is only about $40 or so a month for 3000 kilobits per second access. Unfortunately, businesses are still paying a premium for their need for reliable connections. One firm’s T1 access to the Internet costs $500 a month and is under half the speed of the average broadband connection.
Once the situation was communicated effectively, most firms found employees were more understanding of the reasons for the policy and were more compliant.
The NSPE-PEPP HR Directors’ listserv is open to all participants (HR Directors and/or AEC Principals) who have attended one of the NSPE-PEPP HR Roundtables.
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Should H 1-B Visa Levels be Increased?
Applications to acquire H 1-B visas from the U.S. Bureau of Citizenship and Immigration Services for temporary skilled foreign workers are due on April 1 and concerns are being raised by some leaders in the high tech industry that the 65,000 limit for workers with advanced degrees acquired in the U.S. is not enough to meet their needs.
Tell us what you think. Should H 1-B visa levels be increased to address engineering talent shortages in the U.S.? How is this issue affecting your firm?[ return to top ]
Free NEES Web Seminar on Seismic Performance of Bridge Systems
Seismic Performance of Bridge Systems with Conventional and Innovative Designs is a 90 minute online web seminar highlighting new NEES research and its practical implications. University of Nevada, Reno, Professor Mehdi "Saiid" Saiidi and Michael Keever of the California Department of Transportation will explain:
* How bridge components were tested at various facilities, and results were aggregated through hybrid testing technologies
* How soil-structure effects at the footings and the abutments
* Abutment-superstructure interaction and its effect on bridge piers
* The relative performance of components, bridge piers, and bridge systems
* The effectiveness of new fiber composite piers and column plastic hinges
* How the bridge model performed relative to current design assumptions and philosophies
To participate, you must preregister at www.nees.org.
This session is cosponsored by the Network for Earthquake Engineering Simulation (NEES) and the Earthquake Engineering Research Institute (EERI).[ return to top ]
Take the 2008 Milton F. Lunch Ethics Contest Challenge
All current NSPE individual members, NSPE state societies, and NSPE chapters (including student chapters) are invited to participate in the 2008 NSPE Milton F. Lunch Ethics Contest. Here's your opportunity to match your wits with experienced PEs and engineering students throughout the country!
Contestants are encouraged to analyze the facts of a real situation involving the ethical obligation of an engineer when a client fails to obtain necessary building permits and code approvals. Contestants must discuss and develop conclusions about the ethics of the engineer in the case using the format of the NSPE Board of Ethical Review. Entries must be 750 words or less and must be received at NSPE Headquarters by Friday, April 18, 2008.
The winning entry will receive a certificate, recognition in PE magazine, and an award of $1,000 ($500 to the NSPE state society or NSPE chapter and $500 divided among the authors), provided by NSPE and the NSPE Educational Foundation.
Judges will decide the winner based on the quality of the entry in form and presentation, demonstration of understanding of the implications concerning ethical or unethical behavior, and comprehensive analysis of the case and arguments supporting the conclusions.
The contest is named for NSPE’s former general counsel who played a key role in the founding of the NSPE Board of Ethical Review.
Please visit the "Ethics" section of the NSPE Web site for additional information or to download a contest flyer in PDF format.[ return to top ]