risk management for architects

Risk Management for Architects – the Basics

Architecture and risk

Architecture and risk have always walked hand in hand. Considering the amount of stakeholders and interests to balance, architects are always at risk of becoming liable for direct or indirect damages. 

Add that to the fact that commercial real estate projects are very competitive, demanding, and expensive – and you will see how much legal pressure there is with every blueprint.

As an architect, you must ensure your risk management is on point.

Risk management in architecture identifies, assesses, and mitigates potential risks that may affect the design, construction, and operation of a building or project.

The goal of risk management in architecture is to protect the interests of the architect, the client, the contractor, and the end-users, as well as to ensure the built environment’s quality, safety, functionality, and sustainability.

Most common risks for architects

Among all the risks you face as an architect, these are the most common ones:

Liability for free advice

Architects can be sued for negligence if they give free advice that causes economic loss to someone who relies on it, even if they did not intend to create a professional relationship. 

To avoid this risk, – use disclaimers or refrain from giving free advice.

Liability for design and documentation errors

Any architect can be sued for negligence if they make mistakes in their design or documentation that result in defects, delays, or damages in the construction or operation of a building or a project. 

To avoid this risk, architects should follow the standards of care, use quality control procedures, and carry professional liability insurance.

We take documentation extremely seriously at PlanMan – and our document management module makes sure you always use the latest versions of all of your documents and manage client access to them.

Liability for contract administration

Architects can be sued for negligence if they fail to properly perform their contract administration duties, such as supervising the contractor, issuing certificates, or resolving disputes. 

To avoid this risk, follow the contract terms, document their actions, and communicate clearly with the client and the contractor.

Double-check yourself using this guide on architectural contracts and invoicing to make sure you’re not repeating common mistakes.

Liability for certification

Architects can be sued for negligence if they issue inaccurate, incomplete, or misleading certificates, such as certificates of compliance, occupancy, or payment. 

To avoid this risk, architects should inspect the work thoroughly, verify the information, and use standard forms.

Liability for inspections and valuations

Architects can be sued for negligence if they conduct inspections or valuations that are inaccurate, incomplete, or misleading, such as pre-purchase inspections, condition reports, or cost estimates. 

To avoid this risk, you should inspect the work thoroughly, verify the information, and use standard forms.

Liability for pro bono services

Architects can be sued for negligence if they provide pro bono services that cause economic loss to someone who relies on them, even if they did not charge a fee. 

Use disclaimers or treat pro bono services as regular services to minimise this risk.

Liability for working in specialist areas

Architects can be sued for negligence if they work in specialist areas that require specific skills or knowledge that they do not possess, such as heritage conservation, sustainability, or accessibility. 

To make sure this risk does not affect you, always try to obtain the necessary qualifications (e.g. BREEAM and LEED), experience, or advice before working in specialist areas.

Liability for secondment of staff

Architects can be sued for negligence if they second their staff to another firm or organization and their staff cause economic loss to someone who relies on their work. 

Always work with vetted sub-contractors and co-consultants, and our co-consultant project management module will make sure you’re always on the same page with them.

Risk management for architects

Risk management is a complex area – but you can get the most covered using the basic techniques we’ll list below.

Conduct risk assessment

You should identify and analyze the potential risks affecting their projects, such as design errors, construction defects, legal disputes, or financial losses. Evaluate the level of risk and prioritize the most critical issues.

Implement mitigation measures

As an architect, you should select and apply the appropriate strategies to reduce or eliminate the risk level, such as avoiding, transferring, reducing, or retaining the risk. 

For example, use quality control procedures, contract terms, insurance policies, or contingency plans.

Monitor and review the risk management process

Architects track and measure the performance and effectiveness of the risk management process and the risk mitigation measures using indicators, audits, or feedback mechanisms. 

You should also review and update the process and the measures as needed.

Communicate and consult with the stakeholders

Impeccable communication with all the parties involved sets beginner architects apart from true professionals.

You should engage and inform the relevant stakeholders about the risk management process and its outcomes using appropriate methods and channels, such as reports, meetings, or workshops.

We have added an advanced client communication module to PlanMan specifically for that purpose – so you can never be out of sync with your clients or project stakeholders.

Align risk management with their business strategy

You should ensure that your risk management process supports the strategic goals and needs of your clients and their projects. Risk management needs to be a part of your business plan as you grow your architecture business.

Adapt to changing circumstances

More than anyone, architects should be aware of the changing needs and challenges of their clients and their projects due to external factors, such as market trends, regulations, or pandemics.

Demonstrate the value of your design solutions and address factors such as health, safety, resilience, and sustainability. Our project management software will help you care for the mundane and focus on growth.