Does your insurance cover exposure from design-build jobs?
The design – build approach can be advantageous for a project owner as well as the contractor. The relationships do require the contractor to assume the responsibility for the design contract. As a result, contractors must confirm that their insurance scheme protects them from exposure that may result from this liability.
There are several ways to deal with this exposure. First, the designer’s professional liability policy can be used to protect the contractor. Second, the contractor’s general and umbrella liability policies, while typically excluding professional liability, can be helpful if the contractor can obtain a professional liability policy with coverage for defined professional services. This definition should be reviewed carefully to ensure design – build exposure is protected.
Prior to bidding, it is critical to ensure a contractor’s insurance program provides protection for added design responsibility. This is important to the project owner and designer as well since a failure to adequately insure against possible risk may affect all parties to the project.
