Indemnification - What You Need to Know Feb 25 2015

Clients wish to seek the same protection from both consulting engineers and contractors, not understanding that there is a distinct difference – which ironically we understand the law recognizes, but first there has to be acknowledgement by the client that there is a difference!

Recently, more and more consulting engineers and geoscientists have been faced with onerous indemnification clauses by clients, leaving consultants with uninsurable risk. It appears that the root cause of this line of reasoning stems from an incorrect assumption that contractors and a design team should be treated the same.  Here is our understanding about why there is a difference.

Excerpts from ENCON’s Professional Liability Perspective
Contractors do work.  Their work is subject to a guarantee. They are obligated under the law to stand behind that work, and they are generally held responsible for damages caused by their faulty workmanship.  Architects and engineers do not perform the work; they perform professional services.  They are not obligated under the law to guarantee that performance, not even its result.  They are generally held responsible only for those damages caused by their failure to exercise reasonable professional care…

ACEC-SK continues to advocate for changes to indemnification clause language that is equitable and balanced – recognizing the needs of both the client and the consultant.

ACEC-SK advises all its members to ensure they have a complete understanding of the consequences of ANY indemnification language before entering a contract.  Clauses that create UNINSURED RISK for the consultant could lead to dire consequences for any firm should a party to the contract choose to take action.

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