You don't have to make a mistake to be sued...
- Date: 29/11/2011
One of the benefits of insurance with ITIC is the cover provided for defence costs. As a naval architect you could receive a claim from a vessel owner for a case you worked on even if you were not negligent in your design. The following claims examples demonstrate that even if you are not responsible for the original design of a vessel, there is still the possibility that you could be involved in legal proceedings, which will be costly and very time consuming.
An architect in Australia was contracted to design the hull and rigging for a new yacht. Another naval architecture firm was contracted to design the interior. The yacht was completed and delivered to the owner. However, during a party on board one of the guests became ill and decided to go to sleep early. When he awoke, in the middle of the night, he fell down a small set of stairs inside the yacht.
The guest suffered damage to his back and hip and as a result sued all parties involved with the yacht. The parties included the owner, the builder, the surveyor and the two naval architecture companies. Legal counsel was appointed by ITIC to defend the naval architect who was insured by ITIC. Despite the fact that any design fault on the interior of the vessel had no relation to the work carried out by the architect insured by ITIC, they were jointly sued in the amount of USD 1 million. Lawyers spent over USD 150,000 and 7 years attempting to obtain a judgement of removing the naval architect from the proceedings.
A costly event, for something that was not even the architect's fault.
A word of warning
A naval architect, insured by ITIC, was instructed to investigate the cause of continued cracking in the hull of a vessel. The naval architect produced a report, which concluded that the original architects had failed to properly test for the natural frequency of the plates, which resulted in excessive vibration of the hull.
On the basis of this report, the owner issued proceedings against the original naval architects. However, the original architects managed to defend the claim successfully as they were able to show that they had adequately tested for the natural frequency of the plates and that any further testing would not reasonably be required.
It subsequently became apparent that ITIC’s assured had had these documents in their possession the entire time, but had failed to realise their true significance when drafting their report. The owner then made a claim against the assured for the losses (mainly wasted legal costs) suffered as a consequence of relying on the defective report.
This was another expensive and drawn out process.