AOLS - Articling Students

Insurance and Risk Management Advice

September 2018

Laura Stewart – Arthur J. Gallagher CanadaStephen Black – Maltman Group InternationalMartin Nisbet – Insurance Advisory Committee

1. Introduction• Who is Who?

2. Background• Insurance Advisory Committee• Insurance Basics• General Liability vs. Professional Liability

3. Professional Liability Insurance Program• Features and Benefits

AGENDA

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4. Common Surveyor Errors• Layout / Elevation• Setback• Construction Layout• Water Boundaries

5. Recent Claim Examples 6. Suggestions on How to Avoid Errors7. Top 10 ways to ensure a problem on your next construction project

AGENDA

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8. Limiting Exposure to Liability

9. What to do when you have a Claim• Role of Adjuster• What to say / not say

10. Why do Losses Happen?

11. The Cost of making an Error or Omission

AGENDA

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• Insurance Broker• Insurance Company • Claim Adjuster• Insurance Advisory Committee

Introduction – Who is Who?

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• Executive Director – Blain Martin• Broker – Mark Sampson, Laura Stewart• Adjuster – John Breese, Stephen Black• OLS’:

• Joseph Young • Dan Dzaldov• Rudy Mak• Martin Nisbet• Roy Kirkup• Alister Sankey

Current Members of the Insurance Advisory Committee

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• No Legislative Authority – only deals with issues regarding the AOLS Professional Liability Program

• Review claims presented by the Adjuster• Give technical advice to the Adjuster on

the negligence of the Surveyor • Suggest ways to mitigate the loss

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Role of Insurance Advisory Committee

• Review the Insurance Program rates and performance

• At its discretion, may refer a member and the reason for their concern to the Registrar when:– in the opinion of the Committee the issue may

represent a risk to the public.

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Role of Insurance Advisory Committee

• Insurance Basics• What is Insurance?• Role of Broker, Insurer, Adjuster, Insurance Advisory

Committee

• Types of Insurance required by a Land Surveyor

• Property Insurance – first party coverage• General Liability Insurance – third party coverage• Errors and Omissions Liability Insurance – third party

coverage• Auto Insurance – first and third party coverage

Insurance Background

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• Standard of Care• Professional Negligence

• General Liability vs. Errors and Omissions Liability

• General Liability– Bodily Injury or Property Damage– Occurrence based policy

• Errors and Omissions Liability – Financial Injury– Claims-made based policy– Min. required coverage as a professional = $500,000 per claim,

$1,000,000 policy aggregate

Insurance Background

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Professional Liability – Claims-made Policy

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June 1/15 June 1/17June 1/16

Error!Dec. 1/15

Claim Discovered & Reported: April 1/16

Claims-made based policy: • Policy in force at the time of the claim is discovered/made

Policy #1 Policy #2

Professional Liability – Claims-made Policy

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June 1/15 June 1/17June 1/16

Error!Dec. 1/15

Claim Discovered & Reported: Nov. 1/16

Policy #1 Policy #2

Claims-made based policy: • Policy in force at the time of the claim is discovered/made

Professional Liability – Claims-made Policy

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June 1/15 June 1/17June 1/16

Error!Dec. 1/15

Claim Reported: Jan. 1/17

Policy #1 Policy #2

Claim Discovered: April 1/16

Claims-made based policy: • Policy in force at the time of the claim is discovered/made

Professional Liability – Claims-made Policy

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June 1/15 June 1/17June 1/16

Error!Dec. 1/15

Claim Discovered and Reported: Oct. 1/17

Policy #1 Policy #2

Claims-made based policy: • Policy in force at the time of the claim is discovered/made

• Key Messages:• Immediately report any potential error/mistake as

soon as you realize or discover the error!

• Immediately report any incident that it is alleged that you have made an error (oral or written)!

• There is no cost to notifying the insurance provider of a potential error!

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Errors & Omissions Liability Policy

• Professional Liability Insurance Program =

• Insurance Company: Novex Group Insurance (division of Intact Insurance)

• Claim Adjuster: Maltman International

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The Insurance Program

• Broad Insurance Coverage• Expert Claims Handling• Competitive and Stable Pricing• Free Retirement Insurance Coverage• Superior Service and Advice• Access to Business Insurance and UAV

Insurance Program

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AOLS Professional Liability ProgramFeatures and Benefits

• Setting of Benchmarks • for use by clients or sub-trades

• Incorrect Cut Information – calculation errors • +/- incorrect reference• top of footing elevation instead of underside of footing

elevation

• Topographic Surveys – elevation errors• Problems with locating structures, or calculation of

earthworks

• Relying on benchmark or elevation information provided by other parties or movable objects

• Fire hydrants, tops of curbs or manholes

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Common Errors: Layout / Elevation

• Land Surveyor retained to provide residential stake-out.

• The starting elevation point was 1’5” lower in the Party Chief’s notes compared to what was shot on site by the field crew.

• Calculation error determining elevation for top of garage walls resulted in the walls as poured being 1’5” lower than original design.

• House elevation was correct. • Damages being claimed for extra excavation costs for

drainage in addition to lost trees & landscaping. File settled for $26K + $4K investigation costs.

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Claims Example: Layout / Elevation

• Look Around• the most common issues could have been avoided

by noticing that what was staked does not fit in.

• Ask, Ask, Ask • You can bring in benchmarks to a site but why not

ask for temporary benchmark from engineer, site super, others to check into

• Don’t just check into the supplied temporary benchmark as you do not want to rely on their benchmark and possible error

• Crew should advise their office of discrepancy

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How to Avoid: Layout / Elevation Errors

• Cuts• Write cut on notes FROM STAKE so when

checked in office know what was written• Provide cuts on stake-out sheet so there is back-

up for what was done

• Take a Picture of Stake• After noting cut, showing cut and the conditions

around the stake• Provides proof of cut and of stake in case it is

moved which is often the case

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How to Avoid: Layout / Elevation Errors

• Residential and Commercial Layouts • Mistakes made in locating boundaries• Errors in mathematical calculations• Failing to check house plans or changes in model

or reversal of elevation• Failure to check for prior minor variances or

subdivision agreement variations (bylaws, unique topography)

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Common Errors: Setback

• Most Front, Rear, and minor Side yard setback issues

• Resolved by minor variances

• More serious setback infringement can result in:

• Demolition and reconstruction• Upgrades to windows and doors

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Common Errors: Setback

• Land Surveyor retained to provide construction layout survey for an in-fill house. New construction utilizes almost the entire buildable envelope of the lot.

• An error is made laying our the house so that it ends up skewed on the lot encroaching into the sideyardsetback on one side. Four options are available.

• 1 - Obtain a variance.• 2 - Obtain additional property from the abutting lot.• 3 - Modify the house to obtain fire code compliance.• 4 - Move the house.

Each step is progressively more expensive, from as little as $1K to $100K - $150K+

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Claims Example: Setback

• Put onus on Client to provide Setbacks• Put it in writing that if they do not provide same they

acknowledge you are not responsible• DO NOT RELY ON ARCHITECTS

• for anything!!! • ASK, ASK, ASK

• When site plans on architects floor plans do not match it is not the surveyor’s job to figure it out

• It usually means someone gave the surveyor the wrong version

• Internal communication at survey office

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How to Avoid: Setback Errors

• Gridline errors• Foundation issues• Piles and/or Caissons errors• These errors caused by:

• Plans being out of date• Using plans not intended for construction or using

preliminary plans• Use of different formats in reproducing plans (digital,

pdf, AutoCad)• Poor communication with office, architect, engineer,

contractor

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Common Errors: Commercial Layout

• Land Surveyor retained to provide survey layout services for the construction of a large commercial development.

• An error setting temporary benchmarks resulted in the elevation of the floor of the main complex being 1 ft higher than planned.

• This resulted in a claim for extra costs for additional fill for the parking lot to bring the parking grade higher. File settled for $100K + investigation costs.

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Claims Example #1: Commercial Layout

• Land Surveyor retained to provide survey layout services for the construction of a large pre-fabricated residential building.

• During the initial calculation stage using the “for construction” drawings of the 2 wing structure, a scaling factor was introduced to obtain a coordinate match. Unfortunately this scaling factor caused the pile positions to be laid out so that the pre-fabricated structure would not fit the foundation piles. This caused a 2 month delay in construction as the piles were re-located.

• Remedial costs $100K to re-locate the piles and change the foundation design and $75K for delay costs. Investigation costs were approximately $15K.

• If this sounds familiar, we’ve seen it several times. We’ve also seen angular errors introduced as well as grid offset errors.

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Claims Example #2: Commercial Layout

• Similar to Setback Errors:• Put onus on client, do not rely on architects, ASK, ASK, ASK,

internal communication

• Do not rely on cad files, get paper set and make sure they match

• Keep a paper trail of versions, normally construction starts before they finished or checked the drawings.

• The paper is what governs. If they say use the cad, get it in writing and then decide if you agree to do so.

• Do not calculate buildings on site. Do not provide notes or cut sheets without office check.

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How to Avoid: Commercial Layout Errors

• Be careful what you give at Site • Consider a different layout sheet with only offsets

and points numbers

• Keep track of when work has been checked and docket time as back-up

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How to Avoid: Commercial Layout Errors

• Failing to identify title issues• Reserves

• Boundary issues created by failing to identify encroachments or adverse possession

• Interpretation of historical plan• Crown patents, original grants

• Poor research of older surveys• Interpretation of terms

• High water mark, top of bank, accretion or erosion and their effect on water boundaries

• Intent of landowner or surveyor to include excess lands or beach front in the subdivided lands or retain it

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Common Errors: Water Boundaries

• Requires proper research• If you don’t normally do water boundaries, ask

others more familiar for advice

• Consider transferring to a Surveyor has more expertise/experience

• Get Ministry’s opinion• Refer to it on communications

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How to Avoid: Water Boundaries Errors

10. Assume that missing dimensions on site plans or architectural plans are not critical to the layout and that it’s OK to scale or compute them without further verification.

9. Assume that digital files from other consultants are always reliable and that you can enquire the drawing to obtain missing design info needed for layout.

8. Believe the site super when he says that the drawings in the trailer are the latest approved drawings and can be used for caisson layout and nothing should change.

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Top 10 Ways to Ensure a Problem on your Next Construction Project

7. Allow a field crew to attend on site for preliminary work prior to undertaking the necessary survey research and/or before the client approves of the scope of work and the associated fees.

6. Allow field crews to respond to changes to a design after they arrive on site (ie PC is handed the latest drawings or asked to layout a few unexpected extra points).

5. Allow field crews to use the contractors control or grid points to verify the contractor’s work or to continue with additional layout.

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Top 10 Ways to Ensure a Problem on your Next Construction Project

4. Allow field crews to set vertical control on a site from a single bench mark located down the road or from the on-site fire hydrant used last year.

3. Respond to a client’s midday unexpected request for a RUSH crew to stake some key points for excavation or for footings.

2. Continuously alternate crew staff or their equipment prior to attending a construction site and assume they are self sufficient “to carry on” thereby failing to adequately instruct or supervise them.

1. Allow the party chief to prepare fieldnotes and/or to finalize field checks including level loop closures in the office the next day or “whenever he is not too busy”.

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Top 10 Ways to Ensure a Problem on your Next Construction Project

• In the Field• Acceptance of evidence / verbal statements• Obtaining a site benchmark or control info from a

contractor• Document everything you do

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Limiting Exposure to Liability

• Legal Plans• Difficult to do for legal plans that are deposited or

registered• Make reference on the plan that the report is a part

of the survey• Refrain from use of terminology that has a legal

Implication (example: encroachment, possession, right-of-way).

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Limiting Exposure to Liability

• Topographic Plans• State of the source of data if compiled, i.e.

boundary info.• Qualify utility information for buried services

(compiled or surveyed).• If surveyed in winter conditions put a note that

survey may be incomplete.

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Limiting Exposure to Liability

• Proposal Letters & Contracts• Clearly define scope of work to prevent scope

creep and cost over runs and back charges.• State the role you will play in a project and limit the

extent of expertise you will provide (i.e. you are the OLS not an environmental engineer).

• Inform client that you will provide an opinion based upon your collection and analysis of evidence and you can’t guarantee and outcome in a hearing or in the courts.

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Limiting Exposure to Liability

• Survey Reports• Define the nature or scope of work that was

undertaken • Provide a review of evidence and significant

findings.• Base conclusions or opinion on proven facts.

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Limiting Exposure to Liability

• Digital Files• Digital information is provided for convenience

only.• Data contained on CD/DVD/e-mail attachments

etc. are not certified.• Contents are not guaranteed to have been

received/transferred in whole or compatible with software at receiver's end.

• Digital data is not to be reissued or transferred to a third party without your express written consent.

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Limiting Exposure to Liability

• Final Thoughts• Review & Maintain minimum standards of care including

reasonable expectations of crews.• Establish In-house guidelines for construction surveys.• Establish In-house guidelines for preparation of field notes.• Provide in-house training or access to seminars for all

technical staff.• Establish corporate Policy for Quality Management System.• Establish, document and maintain a QA/QC procedure.• Establish & maintain appropriate document control process.• Limit liability through the use of disclaimers.

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Limiting Exposure to Liability

• Do not Admit Liability• Many claims could have been avoided by client or

subcontractor• Report the Claim Immediately

• Cooperation – The Adjuster is on your side, admit the truth, provide required information

• Do not attempt to Negotiate Settlement• Require direction from Maltman’s/Intact

• Report. Report. Report. Report.• Any error that you feel may give rise to a claim• There is no cost to report a potential claim

• What to Say / Not Say

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What to Do When Confronted by a Potential Claim

• Why Losses occur:• Losses occur because of an error or omission• Errors or omissions occur because of a mistake• Mistakes occur because the proper process /

procedures were not followed or important steps were skipped

• Mistakes happen – it’s what you do when they happen!

• Do not take shortcuts! • Always follow the proper procedures!• Pay particular attention to construction related work!

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Why do Losses Happen?

• Per Claim Deductible • Claim Surcharge• Hidden Costs:

• Reputation: individual, firm, client• Productivity: defending allegation / claim • Profitability: loss of fees, unpaid remedial work

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The Cost of making an Error or Omission

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Discussion and Questions