Reinsurance
Product Family

It is increasingly common for owners to hire an individual or firm to act as an owner representative (OR, owner rep).  The scope of services for owner reps varies widely.  Some ORs simply act as a single point contact for the owner, while others do much more.  They may help define the owner’s program or objectives and select the design team.  They may hire the construction manager and coordinate the designers.  They may be empowered to make cost decisions and schedule changes, and approve change orders.  A few ORs even assist in obtaining funding for their clients. 

But while the practice is increasing, so are reports from architects and engineers who have experienced difficulties on projects with owner reps.  For architects and engineers (A/Es) working with owner representatives can be a positive or negative experience, depending largely on the knowledge and attitude of the OR.    Several design professionals reported very positive experiences, noting that the right owner rep can bring much-needed know-how to a project.  A/Es pointed out that a good owner rep can facilitate communication and help resolve issues between the owner and the design and construction team. 

The most common complaint about working with owner reps is the loss of a direct line of communication with the owner.  Many design professionals also object to the increased time and effort required of the design team when working with ORs as well as a tendency of the OR to second-guess design decisions.  Lack of qualified people on the staff of some ORs is another concern, as well as the potential for adversarial relationships – both of which increase the likelihood of disputes. 

There are some steps A/E firms can take to address many of these issues.  The steps include educating owners on the risks and benefits of working with ORs; practicing careful project selection; understanding the importance of a team approach and enhanced communication and documentation; and coordinating contracts and workscopes with those of the OR. 

Using information from interviews with architecture and engineering firms, XL Catlin’s Design Professional claims staff and practicing owner representatives collaborated and prepared a white paper – Working with Owner Representatives -- outlining some of the issues surrounding working with owner reps, and offering some thoughts on related risk management practices.

Download a copy here

Subscribe

More Articles

Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.