African Design Magazine ADM #36 December 2017 | Page 45

UNDERSTANDING YOUR FINANCIAL
RISKS AS AN ARCHITECT
rchitects are problem solvers. Whether you are working to provide affordable
housing, to ensure compliance through environmental design, or to restore
cherished historical sites, you are constantly solving problems through design.
But solving these problems often leads to increased financial risk due to the
associated complexity. These financial risks are sometimes difficult to gain an
in-depth knowledge and understanding of and the profession faces many potential
financial risks that are not necessarily found in other professions, due to potential errors
that can creep into designs and buildings.
For instance, limitations of location, compliance with building codes and zoning laws,
project schedule requirements, and clients' budgets are just some of the parameters within
which architects must work to plan and design buildings and other structures.
“Green architects" who concentrate on designing spaces that are compatible with the natural
environment and incorporate environmentally-friendly elements often incorporate the use
of new materials or design techniques that are untested and could lead to defective design in
the long term. In addition, engineering expertise might be needed to solve specific technical
problems, including structural, mechanical, electrical, and civil engineering complexities.
In certain instances, architects might be required to assess potential design changes,
supervise tests and inspections, process contractor applications and oversee the construction
process, covering cancellation of contracts, faulty design, the value of limitation on liability
clauses and negative payment certificates, among others. This also entails legal risk
management, ensuring that all parties involved fully understand their potential exposure to
legal liability.
In short, the sum of these activities can be a substantial risk to architects and can culminate
in errors, omissions, and negligence in the preparation of plans, designs, drawings and
specifications. Failure to comply with legal requirements, such as environmental
regulations, all applicable building codes and regulations is a substantial risk.
Breach of contract or failure to fulfill fiduciary responsibility or exceeding the
responsibilities of an architect or general contractor, if the architect provides the services of
both design and construction, is a risk that must be managed...
For more information or an obligation free quote on Errors & Omissions Insurance contact
us on 0861 11 13 53 or sms “quote” to 45577. Terms and Conditions apply.
This article has been wri en by Kenneth van
Sweeden, General Manager: Professional
Liability @ Auto & General Insurance
Company Limited, an authorised financial
services provider. (FSP number 16354).
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