What "Construction Services" Require Professional Liability
By W. Meade Collinsworth, CPCU, ARM, AIM, AAI
1. Design/Build Firms
Firms which decide to participate in the “Design/Build” Construction Delivery System agree to both construct and design the project. What distinguishes this form of project delivery system from the traditional method is the “single point of responsibility” which mandates the Design/Builder to be responsible for the design of the project as well. Again…please note: “The Design/Builder assumes the responsibility of the design services…in addition to the traditional construction means, methods, process, procedures, sequences and safety”2. Construction Managers/Consultants
Construction Managers typically work with the “Owner” of a project and design professionals from the beginning of design until project completion. Some of the possible services that can be provided by Construction Managers are:
Project Management
Designer Selection
Designer Orientation
Designer Contract Preparation
Design Phase Milestone Schedule
Time Management
Cost Analysis/Management Control/Reports
Cash Flow Analysis
Construction Market Survey
Project and Construction Budget
Value Engineering Review/Analysis/Implementation
Establishment of Management Information Systems
Design Phase Procedures
Project Management including Progress Meeting & Conferences
Review of Design Documents/Recommendations
Approvals by Regulatory issues
General Conditions Review/Analysis/Implementation
Project Funding
Revisions of Master Scheduling
Monitoring the Design Phase Milestone Schedules
Pre-Bid Construction Schedules
Pre-qualifying Bidders/Advertisements & Notices
Bid Opening Review Analysis
Review and Implementation of Construction Documents
Permits/Insurance/Labor Affidavits
Quality & Warranty Review/Reports/Control/Analysis & Approval
Change Order Review/Analysis/Reports/Control & Approval
Progress Payments Review/Analysis/Reports & Approval
Contractors Safety Program Review/Analysis/Approval & Implementation
Services related to Investigation/Evaluation/Appraisals of existing Conditions/Facilities/etc.
Determination of accuracy of existing drawings or other information.
Claims & Litigation Support
Don’t forget…when you review the possible services that can be provided by this delivery system…it is important to remember the vast majority of Construction Managers will be covered only by the usual Commercial General and Umbrella/Excess policies. The Commercial General and Umbrella/Excess policies respond to allegations of negligence…which cause Bodily Injury and Property Damage type claims as narrowly defined in these coverages. But…the vast majority of claims that may arise…most likely will not cause any type of Bodily Injury or Property Damage type claims to trigger these coverages…hence no coverage. As a result…Contractor/ Construction Managers Professional Liability coverage is required to respond to the vast majority of these claims that may arise from professional services. Also, the precise duties of Construction Managers must always be carefully defined in the contract with the Owner and coordinated with existing coverage.
3. Any Contractors Who Contracts Directly With Any Design Professional...Environmental Consultant or Related Professional...
Contractors are increasingly dealing directly with design professionals when providing construction services. If a contractor works directly with a design professional…the contractor can be vicariously liable for the performance of those design services. Obviously, the meaning for a contractor can vary, but whenever this relationship exists…the contractor may be vicariously liable for professional services rendered on the project by the chosen professional.
W. Meade Collinsworth, CPCU, ARM, AIM, AAI, is President of Collinsworth, Alter, Fowler, Dowling & French Group, Inc., a Miami Lakes, Florida insurance agency specializing in insurance for architects, engineers, land surveyors and contractor construction related activities.
NOTE: This article is intended for general discussion of the subject, and should not be mistaken for legal advice. Readers are cautioned to consult appropriate advisors for advice applicable to their individual circumstances.
© 2008, The Barthet Firm