By Andrew Mendelson, FAIA, Senior Vice President, Chief Risk Management Officer and Diane P. Mika, Vice President, Director of Risk Management Education- Berkley Design Professional
December 20, 2022
Being a prime design consultant on a project provides control over and leverage with subconsultants, but also comes with significant risk in the form of vicarious liability. If errors or omissions by your subconsultants cause damage to your client or the project, you as prime will most likely be held responsible, just as if you had committed the negligent acts yourself.
Given the risks and responsibilities, it’s surprising how many times prime consultants retain subconsultants without a thorough vetting process. Many primes fail to have a written contract with their subs—or only use a brief letter agreement or the subconsultant’s proposal. But consider this: if you have no contract with the subconsultant, or if the contract is inadequate or ambiguous, you could end up paying for the client’s entire loss.
What’s more, primes often neglect to require insurance—or an adequate amount—of their subs. This can put your own deductible and policy limits at risk.
We recommend the following 8 steps to a thoughtful, comprehensive approach to subconsultant relationships: 8 Steps to Successful Subconsultant Relationships