An architect and engineer’s greatest exposure is by far his or her professional liability/errors and omissions. The good news is that a properly drafted A&E professional liability (PL) insurance policy should cover the design firm for everything it does as a design professional.
The scary news is that, by contract (or the actions of an employee on the job site), a design firm can find itself over and above the standard of care and possibly in an uninsured position. All A&E PL policies exclude liability assumed under contract—unless the firm would have been liable in the absence of that contract.
It’s important to recognize this relationship between a design firm’s PL insurance coverage and its standard of care. If a firm agrees contractually to accept risk over and above the standard of care, such as providing a warranty or guarantee, it very well won’t have insurance—which is in nobody’s best interest.