Professional liability: Sharing risks with humans, not technology

At Victor, our professional liability underwriters and risk managers are often asked how risk and professional liability changes for design firms using advanced digital technologies (such as generative design, DfMA (Design for Manufacturing & Assembly), VR/AR, BIM, Digital Twins, etc.). The simplest answer is that humans manage all technologies and the liability question and associated risks stop right there—regardless of the technology used. Professional liability insurance is about shared risks with humans, not technology, and the agreement to insure assumes that the insureds will exercise sound professional judgement in accordance with the standard of care no matter the technology and tools used to deliver those services.

While the design and construction industry pivots to delivering services more efficiently and effectively by adopting new tools, rest assured that the liability calculus remains the same. When someone files a claim or lawsuit against a design firm, liability in a courtroom will rest on how the design professional (the human) exercised professional judgment, measured against the standard of care and, if there’s evidence of negligence, whether that negligence caused harm and damages.

The question of risk is slightly different and more nuanced than the question of liability. Is a firm exposing itself to more risk by using transformative technologies to deliver professional services? The answer is that it depends. The risk exposure depends on the people using digital technologies: their competence, their quality controls, their communications skills, their abilities to document clearly expectations in contracts, and their service execution throughout the design and construction phase. Clearly, a design firm that maintains strong talent and complements that talent with advanced digital tools in the delivery of those services to communicate and document more effectively and efficiently with all project stakeholders will have a competitive advantage in the marketplace. Notably, those companies will also enjoy strong shared-risk relationships with professional liability insurers, not a small consideration in these economic times.