Inside This Article:
- A $19 million Denver Zoo sea lion habitat project is at the center of a lawsuit alleging design and construction failures.
- The lawsuit alleges multiple defects in the recently opened habitat, including improper water levels, leaks, and cracking.
- Architects & Engineers (A&E) Professional Liability Insurance plays a key role when claims arise from alleged design errors or failure to meet professional standards.
- Policy limits and contractual agreements can significantly influence losses.
A $19 million Denver Zoo sea lion habitat is at the center of a lawsuit alleging design and construction failures, ranging from improper pool water levels to cracking structures. The Denver Zoological Foundation recently filed a lawsuit over the habitat renovation, alleging that both the project’s design firm and contractor failed to perform their obligations. According to KUSA-TV, the complaint centers on the Schlessman Shores exhibit, which opened in 2025, with the zoo operator claiming the work did not meet required specifications and resulted in a range of defects.
The lawsuit points to numerous alleged problems tied to both design and construction, including issues with pool water levels, improper materials, leaks, cracking structures, and malfunctioning systems. The foundation also claims the firms did not adequately address these problems after they were identified.
“This is a case where an alleged design error in a highly specialized structure is leading to large losses,” said Prince Owusu Sekyere, Underwriter, Professional Liability, Burns & Wilcox, Toronto, Ontario. “We are talking about a specialized habitat that will house sea lions. It is not only about structural engineering, but also animal safety and regulatory compliance. Failure to meet these standards can have a lot of ripple effects.”
We are talking about a specialized habitat that will house sea lions. It is not only about structural engineering, but also animal safety and regulatory compliance. Failure to meet these standards can have a lot of ripple effects.
Those types of alleged failures can escalate into high-severity claims, particularly when complex design work is involved. Architects & Engineers (A&E) Professional Liability Insurance can typically respond in these cases, helping firms manage the financial impact of alleged design errors.
“My initial thought with this story was that they would need to have a good A&E policy in place,” said Marcos Abel Baeza, Senior Broker, Professional Liability, Burns & Wilcox, Dallas/Ft. Worth, Texas. “Design errors are exactly what this type of insurance is meant to cover.”
Habitat lawsuit could be ‘full-limit loss’
According to KUSA-TV, the Denver Zoo lawsuit alleges the firms failed to meet contractual obligations, including requirements to perform work with appropriate professional skill and care.
“This is a classic Professional Liability claim exposure,” Sekyere said. “The question becomes whether it is a design error or whether a contractor did not follow the design. At this point, it is not entirely clear.”
This is a classic Professional Liability claim exposure.
That uncertainty is common in large, multi-party construction projects, where architects, engineers, and contractors each play different roles in delivering the final product. Coverage under A&E Professional Liability Insurance, also known as Errors & Omissions (E&O) Insurance, is often triggered by allegations of negligence or failure to meet professional standards.
“In the event there is a claim arising out of a lack of care or failure to exercise professional skill, that is where the policy can come in to help remedy the loss,” Sekyere explained.
While the recent zoo example is an extreme case — one that “could definitely be a full-limit loss” on the architecture firm’s A&E Professional Liability Insurance policy, Baeza said — even minor errors on complex projects can lead to costly losses. “Everyone is human. They are going to make mistakes,” he said. “You absolutely need to have insurance in place before working on any serious project.”
Everyone is human. They are going to make mistakes. You absolutely need to have insurance in place before working on any serious project.
Design errors ‘significantly expensive’
Design errors frequently drive multimillion-dollar lawsuits and, in some cases, can shut down newly built public facilities. Earlier this year, a school district in Washington state sued an architecture firm and contractor over alleged design errors on a newly built $18 million elementary school project after problems with the building reportedly closed the school and forced the relocation of more than 500 students. In December 2025, an architectural firm agreed to pay $9.9 million to the state of New Hampshire to settle a lawsuit over an alleged “massive design error” that caused months of delay on a $49 million psychiatric forensic hospital in Concord.
When design problems emerge during a project, costs can include repairs, redesign, project delays, and potential shutdowns. A&E Professional Liability Insurance policies may include coverage for rectification of errors once they are discovered, but the recent zoo case illustrates “a worst-case scenario” in which errors were not discovered before the project was complete.
“It is a pretty unfortunate situation, but also a classic example of how these claims can develop,” Baeza said. “These things could occur in any given project you are working on.”
Delays, loss of use, and reputational damage can have major financial impacts, Sekyere said. A&E Professional Liability Insurance policies “are designed to respond to professional negligence” and can cover legal costs, settlements, and more. “That can be significantly expensive,” he said.
Policy limits and contractual considerations
Coverage under A&E Professional Liability Insurance policies can vary based on how contracts are structured, and not all contractual obligations are automatically covered, Sekyere pointed out.
“Professional Liability Insurance is generally not designed to respond to breach of contractual liability,” he said. “However, there may be instances where the insured may require or ask for Contractual Liability Coverage Extensions. That would be subject to further underwriting.”
Design professionals should review the limits on their A&E Professional Liability Insurance policies, especially for larger projects, and consider whether Excess Liability Insurance may be needed. “Depending on the nature of your contracts, you may want to request higher limits,” Sekyere said. “Going for higher limits is always recommended.”
Strong risk management practices, including thoroughly vetting contractors and subcontractors, also play an important role. “The best claims are the ones that never materialize,” he said. “When engaged in such specialized work, it is crucial for architects and engineers to review their contracts and ensure there is a clear allocation of the responsibilities.”
Smaller design firms may be particularly vulnerable, Baeza added. “For a small architecture firm, one claim can sink your entire business,” he said. “Everyone is always confident that they will not make a mistake — until a mistake occurs. [Having insurance] is not just for peace of mind; it is also just good business sense.”
For a small architecture firm, one claim can sink your entire business.
A specialized Construction Insurance broker can help professionals ensure they are adequately protected, Sekyere said. “When a mistake happens, you do not want a gap in coverage,” he said. “That is why it is extremely crucial to engage insurance professionals who are well-versed in the industry so they can advise the insured and guide policies.”
All design and construction professionals should be prepared for the possibility of a lawsuit, Baeza reiterated. “We are a very litigious society,” he said. “No one is just going to accept a loss and say you tried your best. They are going to look to recoup their funds.”
