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Hidden Risk in Airport Contracts: Understanding Standard of Care

From causing insurance gaps to straining partnerships, elevated performance clauses in contracts undermine risk management, leaving airports and consultants legally exposed.


Airports across the country are investing in complex infrastructure projects that demand top-tier engineering, design and construction experience.

It’s natural for owners and airport executives to expect high quality from consultants, often drafting contracts with that goal in mind. Unfortunately, some of the words used to express that expectation create unintended consequences. A few well-intentioned phrases like “fit for purpose,” “ensure the design” or “best professional practices” can undermine the owner’s security by rendering the professional liability insurance ineffective.

Beneath every project lies a nuanced web of contractual obligations, where language quietly shapes risk, responsibility and outcomes. A clear understanding of what standard of care truly means in professional services contracts is essential because including such provisions can elevate the owner’s and contractor’s risk.

By using language that sets practical, achievable expectations rather than relying on language that fails to accomplish any real purpose and instead sets unrealistic expectations, airports can avoid undermining the insurance they require consultants to obtain, align on expectations with their consultants, and strengthen accountability, quality and partner relationships.

What Standard of Care Really Means

The standard of care is a tort law concept that exists as a matter of law in the United States. It applies whether or not the language is part of a contract. The standard, as commonly written reads:

“The professional will exercise reasonable skill, care and diligence in the performance of its services and will carry out its responsibilities in accordance with the customary accepted professional practices of the industry at the time and place of performance.”

This standard of care applies to every professional engineering, architecture and geoscience consultant. The language reflects what’s known as the professional standard of care: essentially, how other competent professionals would perform similar services under similar circumstances. It’s the benchmark by which performance is measured and, ultimately, defines the boundaries of professional negligence.

Why Elevated Language Creates Problems

Adding the standard of care to contracts gained traction in the late 20th century as projects grew more complex. While it has become common practice, when it is included in a contract it elevates the standard of care to a warranty, creating unintended consequences.

Courts enforce standard of care clauses in contracts, but professional liability insurance policies deny coverage for warranties. Insurers have built coverage around this concept by stating that coverage exists only when the warranty is no different than the standard at law.

Today, the standard of care remains a cornerstone of professional consultant contracts, but only when applied correctly. When the contract language departs from the professional standard of care that exists at law, problems can start. Add “elevated,” “highest,” “best” and other superlatives to your contracts and the result could be disastrous for all involved.

It’s common to see airport or agency contracts that modify the standard of care clause to include words like “highest,” “best,” “guarantee,” “ensure” or “assure.” On the surface, that might seem like a good strategy to motivate a consultant. In reality, this change can create a major insurance coverage gap that undermines owner security.

Even the most experienced and educated professionals can make mistakes. Expecting professionals to be perfect is unrealistic. Owners and airport executives have always understood this. That is a key reason they require consultants to obtain professional liability insurance. Consultants often lack the financial means to pay for construction mistakes. The ratio of construction cost to engineering profit is often 100:1. If a mistake occurs, owners want the security that a professional liability policy is available to pay for losses the consultants can’t afford on their own.

Professional liability insurance covers the ordinary standard of care but it does not cover promises of perfection or express warranties. When the contract raises the standard to the highest level of performance, the consultant is no longer working under the same insurable standard.

If a proposed contract sets an unreasonably high standard of care, the very provisions intended to safeguard parties involved may instead expose them to greater risk:

  • Insurance carriers may deny coverage because the consultant agreed to an uninsurable promise.
  • Consultants may face personal financial risk and have to withdraw or decline the project altogether.
  • Airports may lose the protection of the consultant’s professional liability insurance, which was the safety net for both sides.

A good analogy: If every NBA player’s contract required them to be “the best,” every player who wasn’t Michael Jordan could fall short and possibly be in breach. There can only be one “greatest,” and it is a virtually impossible standard to maintain.

Deciding to avoid elevated standard of care language is not about supporting mediocrity; it’s about aligning expectations and preserving the security offered by professional liability insurance.

How Elevated Standards Undermine Owner Goals

In practical terms, introducing an elevated standard of care does not improve the quality of design or construction, but it does increase the likelihood of project delays and cost increases. A few complications that could result include:

  • Reduced competition and higher bids. When consultants see uninsurable terms in a request for proposal or draft contract, many will either choose not to bid or will raise fees to account for the additional exposure. Having fewer qualified candidates mean less high-quality competition and higher costs for the airport.
  • Slower negotiations and project delays. Contracts with problematic language often require extensive negotiation to align with industry norms. This can delay notice-to-proceed dates and slow down critical project schedules.
  • Coverage denials and legal disputes. In the event of a claim, insurers may refuse to defend or indemnify the consultant due to express warranty or best performance clauses. This leaves the airport to pursue damages directly from the consultant, often leading to lengthy disputes that stall progress and damage relationships.
  • Strained partner relationships. An unrealistic contract erodes trust. Engineering and construction partners thrive when expectations are clear, achievable and insurable. Setting a fair standard of care fosters collaboration, not confrontation.
Why Airports Don’t Gain Value From an Elevated Standard

It’s worth noting that airports already secure a high-quality performer through their selection processes.

Most airport consultants are chosen based on qualifications, knowledge and past project experience, not through a low-bid approach. This qualifications-based selection (QBS) is designed to identify teams that rank among the most capable in the industry.

Once a highly qualified firm is selected, layering on an elevated standard of care doesn’t improve performance. Instead, it undermines the very risk management framework that protects both parties.

In other words: The airport already has secured excellence through selection; superlative contract language isn’t needed.

The Appropriate and Insurable Standard

An appropriate clause that protects both airport and consultant typically reads:

“Consultant will exercise reasonable skill, care and diligence in the performance of its services and will carry out its responsibilities in accordance with customary accepted professional practices. If Consultant fails to meet the foregoing standard, Consultant will perform, at its own cost, the professional services necessary to correct such errors or omissions.”

This wording clearly establishes accountability; the consultant must correct mistakes at no additional cost, without voiding insurance coverage. It also aligns with how insurance carriers define and price professional liability policies.

Constructive Alternatives to Elevated Language

If the intent behind elevated standard provisions is to promote accountability, there are better, insurable ways to accomplish that goal. Airports can strengthen performance and reduce risk through:

  • Robust qualifications-based selection (QBS). Prioritize systems, skills and overall experience of key personnel during the selection process.
  • Defined quality management plans. Require consultants to submit detailed quality control and review procedures as part of a submitted proposal or contract deliverables.
  • Peer reviews and independent audits. Encourage third-party design reviews or independent QA/QC programs at key milestones.
  • Clear and deliverable expectations. Specify formats, submittal timelines and review processes. Measurable performance criteria are far more effective than aspirational language.

These strategies promote excellence while keeping contracts grounded in realistic, enforceable terms.

The Bigger Picture: Protecting Projects by Protecting Contracts

Contracts set the tone for every professional relationship. When an airport’s agreement contains balanced, insurable terms, it builds mutual trust and accountability. When it contains unrealistic expectations, it inadvertently introduces risk, uncertainty and friction, before work begins.

The safest, most effective projects are those where both client and consultant operate under clear, fair and insurable terms. Ultimately, the goal for every airport project should be simple: Secure the most-qualified professionals, establish mutual trust, and manage risk intelligently through sound contracts and collaboration.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Laws vary by jurisdiction, and the application of legal principles can depend on specific facts and circumstances. Readers should consult with a qualified, licensed attorney for advice tailored to their individual situation.


Author

Doug Lenz

Aviation Operations Director