John Madden, the former NFL coach and TV football commentator, has a risk management plan for travel. He won’t travel by air, thereby avoiding the risk of being in an airplane crash. For all I know, this plan may or may not be formalized in his contract with NBC. But we know he has a plan. It would also appear that it works, since he has not been in an airplane crash.

Your structural engineering firm has a risk management plan. It could be as simple as Madden’s plan, or it could be a formal program that is highly developed. It could be one that was crafted over time by firm members, or it could be one that has not been actively derived, but exists by default through your actions or lack of action. Whatever it is, you can bet you have a professional liability risk management plan.

If your firm is like most, your plan is not formalized. In a recent meeting of approximately 40 structural engineers, only one person raised his hand indicating that his firm had a formal plan. You and your partners know some techniques that can mitigate risks, but you have never had a program to ensure that the firm’s managers are on the same page, or that the staff knows that you have a plan and what it involves.

We have all had the experience of writing our thoughts on a given topic and discovering that by doing so, our thinking is clarified, improved, and better understood. Let’s say your firm has decided that there is a previous type of project which it no longer wants to design. Having a way to document this can solidify, educate, and verify to all in the firm that this is your policy. This is very elementary, but when it comes to risk management, most firms have not documented their policies.

Suppose you or a few members of your staff take 30 minutes to discuss and write down those things which you currently do to manage and mitigate your professional liability risks. Perhaps you have a preferred way to establish fees. If you then ask, "What is our policy and procedure for this?" you may say, "Our policy for establishing fees is that we want to establish a fee that is fair and reasonable, but that provides quality service and a profit for the firm." Or, your procedure may include methods based on the effort required to perform the project (such as task-hour breakdowns) or to develop your fees with consideration for value-based compensation.

As you go through this process, the documentation should be saved in an appropriate place in your firm’s computer network. By doing so, any member of the staff can have access to the firm’s policy and procedure and it can be updated or altered whenever needed.

Taking this one step further, you can organize these policies and procedures into a format that will help in understanding and implementing them. The Risk Management Program (RMP) of the Council of American Structural Engineers (CASE) has established Ten Foundations for Risk Management. These foundations address the primary areas of thinking and practice that structural firms deal with in their day-to-day operations. They also form the basis for focusing risk management efforts. The following is a list of the Ten Foundations for Risk Management:
1. Culture: Create a culture of managing risks and preventing claims.
2. Prevention and pro-activity: Act with preventive techniques, don’t just react.
3. Planning: Plan to be claims-free.
4. Communicate: Communicate to match expectations with perceptions.
5. Education: Educate all of the players in the process.
6. Scope: Develop and manage a clearly defined scope of services.
7. Compensation: Prepare and negotiate fees that allow for quality and profit.
8. Contracts: Negotiate clear and fair agreements.
9. Contract documents: Produce quality contract documents.
10. Construction phase: Provide services to complete the risk management process

Providing an electronic folder in your computer network for each of the Ten Foundations provides a structure around which you can organize your policies and procedures. In this little amount of time, you have now formalized your own risk management plan. This provides a launching point for educating your staff, building a robust plan, and improving how to deal with, avoid, mitigate, or share professional liability risks.

The RMP has an ongoing program to help you establish a plan, and to help make it into a program of risk management. Visit the RMP website at www.acec.org/rmp to read an article on the Ten Foundations and to view a video about RMP. If you are a member of, or join CASE, you can receive tools that will assist you in carrying out your own risk management program.

Give it a try. Just as John Madden can’t avoid a travel accident by not flying, structural engineers cannot avoid professional liability risks by turning down one or two projects.

Douglas N. Elliott, P.E., is the president of Elliott-LeBoeuf & Associates in Springfield, Va. He serves on the CASE Executive and Risk Management Steering Committees and is chairman of the RMP Toolkit Committee.