Bisnow features Managing Principal Bill O’Donnell and Florida Statue 558 Panel

In a Bisnow feature article, Chloe Gallivan dives deep into the negative impact Florida Statute 588 is having on insurance rates and premiums in her coverage of a panel discussion at the South Florida Construction and Development Forum, which included DeSimone Managing Principal William O’Donnell, PE, FRSE, SI.

A diverse panel of industry experts, hailing from architecture, engineering, law, and insurance discussed how engineering and architecture firms are frequently swept into lawsuits and settlements in which they have no liability.

Florida Statute 588 governs the turnover process from a developer to a condominium association. Law firms market the associations to represent them through this process.  While the panel wholeheartedly agrees that condominium buyers are fully entitled to receive what they paid for, the 558 process takes on life of its own as claims are inflated with the ultimate goal of gaining a financial settlement favoring the association and the firms representing them.  This consumes defendant deductibles and insurance proceeds—driving up the cost for all parties involved in the project, which in turn drives up the cost of the built product.

A primary reason for the panel was to garner support from the wider industry, according to William O’Donnell, who noted, "I look at this as a train wreck that's happening in slow motion, but it is happening, and something needs to change.”

Members of design and construction teams, such as structural engineers, are strongly affected by these premiums as they carry professional liability insurance. Insurance carriers are shying away from professional firms designing condominiums for this reason. If a carrier is writing at all, and the number of these willing are greatly reduced, rates and deductibles are high. So, constantly being named in lawsuits when designing a condominium presents a growing problem for all parties designing, developing, and building these projects.

Additional panelists (pictured) included Principal Sherri Gutierrez, AIA, from Arquitectonica, Senior Vice President Robert Hughes from Ames & Gough, and moderator Laurie A. Stanziale, Partner at Fox Rothschild.

Read more and find out what the panel proposes to combat this issue here.

Photo: Bisnow/Chloe Gallivan