Question for Darren Doherty - Designer's liability and risk management on large projects

Hello Darren - Thanks for taking the time to visit the gang here at permies.com

I know we had a good discussion on this over in the Regrarians FB, but I'm not sure I'm finding a lot of satisfactory advice. In a litigious nation like the U.S., anyone offering services or counsel that carries with it risk of failure is open to liability claims. These risks increase with the size of the design, system or landscape. I'm not sure that insurance companies understand permaculture or regenerative agriculture, so I'd like some insight into how to protect ourselves and manage our risk if we 1) design; 2) design & oversee implementation; or 3) design & implement ourselves. All three of these seem to have various levels of risk exposure. I spoke with several landscape architects who told me not to have the drawings stamped (engineer's or otherwise). Then, when I spoke with a risk-management attorney at an engineering firm, he said that even if you label the design drawings "for concept only" it is how the drawings are used which determines if they are design schematics or concept drawings. So, if the design is implemented based on "for concept only" design drawings, they are defacto schematics and therefore are the basis of risk. How do you go about protecting your business as a design consultant and implementation manager for large-scale systems where the risk is staggering. How do we know the insurer understands what we do? How do you manage this kind of risk in operation of your business?

Thanks for your attention.

Dan

P.S. I'd appreciate it if we just assumed, for the sake of this discussion, that the designs are sound to start with.

This is a great question, Dan, thank you for asking it. I look forward to your response, Darren, and thank you for being here!

Here in Oregon, you can't even draw a picture of a tree on a paper napkin without a license, and you can't get a license without being bonded and quite heavily insured. The licensing requirements seem rather one-sided (annual turf pesticide management class?) so I am trying to research alternative pathways to a license that better reflect what a permaculture designer is offering. I will still need to be heavily insured- I don't like the insurance game, but in America the high risk of ending up in court seems to make it a necessity.

Thanks Dan,

Sorry I must have missed that thread at the Regrarians FB Group somehow...

We've never had Professional Indemnity insurance and when I inquired probably 15 years ago (my uncle was Bendigo's biggest broker) it was going to be prohibitive. Reason being? I was not a member of a professional organisation or society that related to my profession. Public Liability is another matter and through our non-profit we were able to get $10 million of cover for about $1600/year (from memory). This doesn't insure us for anything other than courses and the activities within courses though.

The way I look at it, you're insurance is only as good as the legal challenges it can pay for. That is to say if someone really wants to go you and they have greater resources than you do then they will and your insurance will only cover so much of that.

That's one thing...the other thing is that until such time as there are recognised pro-orgs that can get you recognition etc and better insurance deals, you may have to co-opt with another industry in order to get cheaper insurance access. People like Erik Ohlsen in Sebastapol in CA are providing the kind of official training that supports this from what I understand.

Our main strategy however has been to apply high levels of due diligence in what we do and not do things that are risky. We've had the clients hire other contractors directly so that we are not on the 'contractor tree' which thereby separates our liability which would stand if they were our sub-contractor and so on. In short I am a very conservative designer and developer and it that's what it takes then so be it. Asides most of the stuff we do is pretty straight forward and tried and tested and we like to work with folks who have a demonstrated track record in the field as a result.

Cheers,

Darren

Thanks Darren for the insights. It's too bad we have to think this way, but it's a reality of conducting business. I like the idea of ensuring the client do the hiring of the subcontractors. The question arises when the subcontractors claim it's the design that is flawed and not the implementation. This is where developing solid working relationships with people is key.

Thanks again.

Here are some notes I've been scribbling on the different discussion I've been having regarding risk management for permaculture designers:

• Have such a relationship with your client that they understand the variable nature of working with landscapes and complex systems and their role in maintenance
• Obtain bonding and a comprehensive insurance policy
• In designs, favor tried and common design elements
• Ensure all design drawings are labeled “FOR CONCEPT ONLY”
• Develop contract terms that limit liability
• Have client’s goals clearly articulated and signed by the client

• Design only
o Submit design to owner implementer
o Submit design to owner who serves as general contractor
o Submit design to owner who serves as general contractor and collaborate on execution

• Design and serve as personal implementer (greatest level of risk assumption)

• Design and serve as general contractor
o Ensure all subcontractors and service providers are bonded/insured adequately
o Ensure you have a quality working relationship with all subcontractors
o Work with subcontractors who understand what you're doing as a whole