What an Insurer’s Contract Reviewer Looks For: 10 Clauses in a Good Design Contract

Short answer

An architect contract review insurance request often turns up the same ten clauses in the agreements reviewers like best. Many A&E insurers review contracts for policyholders at no cost, so ask your agent before you sign. Reviewers comment on insurability and risk, not legal wording, so your attorney still needs to review the final language.

What clauses does an insurer’s reviewer look for in a design contract?

Reviewers often react well to agreements that include these ten pieces. Wording and priorities vary by insurer and by project.

1. Standard of care. Ordinary skill and care of similar professionals, with no warranty or guarantee. Our article on Best, Highest and Ensure covers words that raise your promise.
2. Limitation of liability tied to fees or a fixed amount. Watch multiples, since ten times a large fee can exceed your policy limit.
3. Dispute resolution in steps. Good faith negotiation, then mediation, then court. Reviewers often recommend against arbitration because it can cost more, is rarely faster and is hard to appeal. Keep the same method up and down the contract chain.
4. Mutual waiver of consequential damages. Examples include lost profits and loss of use.
5. Ownership of your drawings with a limited license. Ask for protection if the owner reuses them on another project. See who owns your drawings.
6. Code changes. You are responsible for codes in effect when you design, not later changes.
7. Existing conditions. You have the right to rely on information the owner provides.
8. Hazardous materials disclaimer.
9. Site safety and means and methods. These stay with the contractor.
10. Mutual termination rights. If the owner can end the agreement for convenience, you should be able to as well.

For model language, the AIA Contract Documents overview and EJCDC engineering contract documents show how standard forms handle many of these items.

Example: a hypothetical agreement with few comments

A firm sends its standard agreement to an insurer’s reviewer before a new project. The reviewer returns almost nothing to change and lists why: standard of care, a fee-based limit, stepped dispute resolution, a consequential damages waiver, a limited license, code changes and existing conditions language. The one caution is that a limit set at a multiple of a large fee could go beyond the policy limit.

In this hypothetical, the firm talks to its attorney about the multiple before signing. Whether the policy responds to a later claim depends on its terms, exclusions and underwriting.

What is the trap in your own contract template?

Reviewers often flag mutual indemnity clauses that include a duty to defend, even in the design firm’s own contract. Your policy may not insure a promise to defend someone else up front. You can end up writing an uninsured obligation against yourself.

In one hypothetical case, a firm’s template includes this clause and the reviewer suggests removing it. Your attorney decides the wording that fits your firm.

How do you get a free contract review from your insurer?

Many A&E insurers review contracts for their policyholders at no cost. Ask your agent whether yours does. These steps may help:

1. Send the policy number with the request, since it often speeds things up.
2. Send the exact version you plan to sign.
3. Point to your specific questions by section.
4. Ask before you sign, not after.

Know the limits. Reviewers comment on insurability and risk. They are not your lawyer and usually won’t approve wording you drafted, so get an attorney for that. They also usually don’t review NDAs or other business documents. Insurance exhibits are a separate task, where you compare the requirements against your own policies.

If you update your template with an AI tool, compare the result to your approved version. Our article on editing contracts with AI explains why.

What to check

• Does your agreement include a standard of care with no warranty or guarantee?
• Is your limitation of liability tied to fees or a fixed amount, and does a multiple exceed your policy limit?
• Does dispute resolution follow steps, and does the method match throughout the contract chain?
• Do you keep ownership of drawings and grant only a limited license?
• Are code changes, existing conditions, hazardous materials and site safety addressed?
• Can you end the agreement if the owner can?
• Does any indemnity clause include a duty to defend?

Related questions

Can you send this agreement to the insurer before I send it to my client?

Often, yes. Many A&E insurers review contracts for policyholders, so ask your agent before you sign. Send the exact version and your policy number.

Will my professional liability insurer review my contract?

Many A&E insurers offer free contract reviews to policyholders. Ask your agent before you sign.

My liability is capped at a set amount. Is my consultants’ work covered?

It depends on your policy and contract. A cap in your agreement doesn’t by itself decide how your policy responds to a consultant’s work, so ask your agent to check the wording.

Can the insurer approve the letter I wrote for the bank?

Reviewers usually comment on insurability and risk rather than approve wording you drafted. Ask your agent what the insurer will review, and use an attorney for wording.

Is arbitration better than court?

Many insurers recommend negotiation, then mediation, then court, because arbitration can cost more and is hard to appeal. It depends on the project and your attorney’s advice.

What clauses should every design contract have?

Common recommendations include standard of care with no warranty, a limitation of liability, stepped dispute resolution, a consequential damages waiver, ownership of documents and mutual termination.

Is an insurer’s contract review legal advice?

No. It covers insurability and risk. Use your own attorney for legal advice.