Despite the liability risk, some architects dare to 'go bare'. (Rising insurance costs prompt some architects to work without liability insurance) (The Business Journal Magazine)(Special Report: Commercial Real Estate)

Despite the liability risks, some architects dare to `go bare'

SKYROCKETING INSURANCE PREMIUMS and deductibles throughout the mid-1980s have forced more small architectural firms to forgo liability insurance and "go bare," according to the American Institute of Architects (AIA).

Milwaukee seems to be no exception to the national trend, although few uninsured architects are willing to discuss their status publicly.

Going bare carries a double whammy. Uninsured firms in Milwaukee find they're subject to increased risks and effectively barred from public projects and most school projects.

High rates are driving up construction costs and severely limiting the available pool of architects and engineers for public projects, said William Babcock, executive director of the Wisconsin Society of Architects in Madison.

It's an unwritten rule that firms hired by Milwaukee Public Schools have at least $250,000 in liability insurance, said Ron Allen, director of the physical plant division. Insurance has become an issue again as the district strives to involve more minority firms in the construction process, he said.

Insurance has been required by the Waukesha School District for at least 12 years, according to Tony Goedheer, business manager.

Like doctors, lawyers and insurance agents, architects and engineers have the option of carrying professional liability insurance, also known as errors-and-omissions insurance, to cover them against charges of negligence.

Approximately 77 percent of sole practitioner firms were not covered by the insurance in 1988, up from 74 percent in 1986, according to the most recent statistics available from the AIA.

Among firms with two to four people, 60 percent went bare in 1988, compared with 55 …