Insurance in Joint Venture

ARE 5.0 project management
#1
  1. will the Architecture firm’s professional liability insurance will cover both firms in the joint venture
  2. since the participants share the responsibility, will one party be liable for errors and omissions of the other party’s employees and vice versa

Thank you.

1 Like
#2

@coachjasongolub do you mind helping @liqi.yang with these questions?

#3
#4

thanks @liqi.yang for the interesting question, and @xurubi for your response!

Another source of information on this topic is The Architect’s Handbook of Professional Practice, 15th Edition, page 1016. I’d suggest reading through the text there on this topic, but a quick summary:
-If a professional liability claim is filed against a joint venture (JV), all parties to the JV are exposed to risk.
-To mitigate this risk, each party to a JV should require the other parties to provide evidence of coverage, and should require that all other parties to the JV have had their policies specifically endorsed to cover the JV.
-It is helpful if each party to the JV has coverage at similar (and preferably, the same) limits, and is covered by the same insurance company. This prevents one firm from acting as the ‘deep pockets’ for the others, in the event that a claim is brought against the JV.

I hope this was helpful!
-Chris