Design Clauses in Engineering Contracts - Industry Standard Wordings in Comparison In large-scale engineering projects, millions of dollars in potential losses hinge on the integrity of each and every constituent part. When a loss event arises from defective design, materials, or workmanship, the design clause determines what is covered and what is not. A clear definition of these clauses is obviously critical, yet the standard wordings found in the marketplace are often confusing and misleading. An analysis of the two industry standard wordings - the London Market Defect Exclusion (DE) and Munich Re wordings - goes a long way toward sorting out the confusion.