Contract Corner #14 - Material Change in Insurance

Monday, April 11, 2016

Member firms have identified numerous concerns with the many forms of non-standard agreements that are prevalent.  This week’s issue is Material Change in Insurance.

Agreements often seek to have the consultant provide advance notice of material change in the amount of insurance available in the event of a claim. For conventional professional liability insurance policies, one type of material change may be erosion of insurance available to one client by claims against the policy by other parties.  The consultant has no way of providing advance notice of this situation, and therefore should not agree to provide advance notice.

Members should feel free to bring their concerns to ACEC-BC by emailing an example of the onerous clause in question, describe its impact on engineering firms and provide a recommendation for action.  Where you may not have any recommendations, ACEC-BC will consult with the Business Practices Committee and others to develop a response to the client over ACEC-BC letterhead.

For more information on contract language visit

The Board of Directors of ACEC-BC has identified unfair contracts and onerous clauses as serious problems facing the consulting engineering community. Over the coming months, “Contract Corner” will provide some ideas and guidance on these issues.

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