Professional Liability Insurance also known as Errors and Omissions Insurance provides coverage for individuals and companies offering professional services such as construction management, design-build contractor services, architects, and engineers.
Professional Liability Insurance provides insurance coverage for only one general cause of loss, or claim against the insured; the rendering of, or failure to render, errors and omission of the specified type(s) of professional services.
A construction manager is contracted by the project owner to manage all or a portion of the construction process for a fee. It is important to note that an W2 employee of the owner would most likely not have any professional liability exposure. The construction managers services create an exposure to errors and omissions, that could result in damages to the owner of the project, which gives rise to the need of professional liability insurance. The common contractual duties of the construction manager may include: materials take-off, project cost estimating, project scheduling, the selection and writing of subcontractor agreements and project management.
The design-builder or design-build contractor, contracts with the project owner to manage the project from inception to completion of the construction, or any portion of the design or construction process.
The design-builder is usually the general contractor, or a design professional such as an architect or engineer, and like a construction manager to a greater or lesser degree, the design-build contractor provides direct or managerial control of the design and engineering process and construction management services to the completion of the project.
The challenge of the design build contractor is to reduce the exposure to errors and omissions. The experienced design-build contractor accomplishes this through a well-crafted design-build contract with the owner, requiring the owner to be involved at all critical junctures of the design process, material selection, color selection and construction process.
Some of the key exposures to errors and omissions for design-build contractors include: the failure to select the correct consultants, errors or omission in subcontracting or subcontractor agreements creation, improper material selection, improper color selection, scheduling errors, construction estimating errors or omissions, failure to have the owner sign off on critical design junctures, material selections, scheduling, subcontractor selection, budget, and or budget revisions.
At Pascal Burke Insurance Brokerage Inc. (PBIBInc), our knowledge of the products and the marketplace we serve is unparalleled. As former contractors, we know the construction industry from the ground up!