The facts

An engineer, Stephanie, was hired on a project to modernize a multi-residential complex. Her main responsibility was to ensure everything met the standards set by the provincial regulatory body and the National Fire Code of Canada. Stephanie was required to conduct regular inspections and issue Certificates of Compliance during construction until the work was finished.

After the construction of the multi-residential complex was completed, the tenants moved back in. A short time later, a fire broke out in the attic of one of the units. The property insurer brought in an independent adjuster and investigators who determined that the fire started because the chimney was too close to the insulation, and there was no firebreak as required by the plans.

The result

Further investigation revealed that Stephanie’s plans clearly stated that there should be enough space between the chimney and the insulation, along with the installation of fire barriers. However, during her site visits, Stephanie could only inspect two of the four units, though she assumed the other units were built the same way. After construction was complete and all the walls were erected, Stephanie had conducted a final inspection and issued a Certificate of Compliance, despite not being able to check all the firebreaks as specified in her plans. This oversight unfortunately contributed directly to the level of liability Stephanie had for damages from the fire.

Stephanie was required to issue a Certificate of Compliance, which meant that she needed to be on-site regularly to inspect the work at key stages. If the walls were closed during the inspection, it would have been wise to open them up to check the firebreaks. By issuing a Certificate of Compliance without inspecting all the firebreaks, Stephanie faced significant potential liability.

Risk factors

Risk factor #1

• Do not certify that which you have not been able to inspect.
• A consultant should  ensure that  the necessary degree and frequency of field reviews to be carried out are outlined in the contract.
• It is good practice to establish a protocol for dealing with inaccessible areas, such as requiring that walls be opened for inspection if necessary.

Risk factor #2

• Ensure adequate and effective communications between project team members to mitigate misunderstandings so that proper inspections can take place prior to walls being closed.

This claim scenario is for illustrative purposes only. Please remember that only the insurance policy can give actual terms, coverage, amounts, conditions and exclusions.