CHANGE SERVICE REQUESTED The California Surveyor ... - CLSA

In spite of being extra careful and following all the good risk management
practices we’ve been discussing the last couple of
years, bad things can happen to good surveyors. Things like
boundary errors, buildings in the wrong places, bad plans, weak
contracts and payment disputes can result in claims that are
incredibly complex and difficult and require massive amounts of
documentation. If you see a claim coming, call your broker for
advice and use the free lawyer consultation feature of your policy.
Don’t wait until the potential claim gets cold. Here are some recent
professional liability claims that Zurich has paid on behalf of land
surveyors:
Loss 1 - Building in the wrong place
A surveying company staked out a new building for a shopping
center. After construction began, it was discovered the building
was 30 feet west of where it should have been. The error
resulted in loss of parking spaces for an office supply store. The
partially completed building was demolished and moved to the
proper location. The project owner filed a claim of $656,000 for
project delay and extra work.
The surveyor accepted responsibility for miscalculation but
said the architect’s drawings were incomplete and misleading
By: Richard Hertzberg, CPCU, ARM, Vista International Insurance Brokers
RISK MANAGEMENT FOR LAND SURVEYORS
Whoops, Something Happened!
because they only contained two, not three,
fixed reference points. The architect said the
third point had been given to the surveyor
by phone. The surveyor failed to document
the new information. Surveyor’s counsel
said the architect should have provided drawings with three reference
points so the building could have been properly placed. It
was argued that a prudent surveyor would not have staked out a
building without a third fixed point so the surveyor did not meet
the required standard of care. After negotiations, the claim was
settled for $350,000 in indemnity and $25,000 in defense costs.
Loss 2 - Church sanctuary too close to another building
A surveyor was hired by a general contractor for construction
staking on a design/build church project. During construction the
GC found a 12-foot difference between the construction drawings
and the staking that put the church sanctuary 12 feet too close to
an existing building. Holes for 50 piers had been drilled and 49
had to be redone at a cost of $100,000. Since the surveyor was at
fault, the insurance company tried to settle the loss for $75,000
but had to pay the $100,000.
Loss 3 - School building off by 30 feet
A contractor was sued for $350,000 by a school district
because a change that should have been made by the surveyor
resulted in a 30-foot misplacement of a school building. The architect’s
plans did not identify the building’s point of origin and the
surveyor notified the architect of the error, which was corrected by
an addendum. However, a subsequent addendum moved the
point of origin by 30 feet and the surveyor was unaware of this
change.
The surveyor was found liable for not identifying the change
even though he argued the new change was not clearly marked
and the architect did not directly inform him of the change. An
adjacent road had to be moved and additional property for a rightof-way
had to be purchased. The school district sued the contractor
and the contractor sued the surveyor claiming that the surveyor
failed to follow contract documents. In mediation, the case
was settled for $230,000 with $80,000 paid in defense costs.
Check, check and check again
Please remember to always carefully review drawings and
documents and if anything seems wrong or out of place talk to the
owner, contractor or architect. Document these conversations
carefully. Also, if you are ever involved in a frivolous lawsuit or a
claim against a contractor where you did the survey work and
were therefore included because your name was on the contract,
remember that you still have to be defended and need a lawyer to
get you out of the suit.
In other land surveyor losses Zurich has settled claims for
stolen and damaged property and equipment, business interruption
losses, general liability, workers compensation and wrongful
termination accusations. Your insurance pays claims to help keep
you in business, in the black and in good graces when the unexpected
and unforeseen happens. ❖
48
www.californiasurveyors.org