Building Chicago -Fall/Winter 2012 - (Page 8)
A METHOD TO NO MADNESS
Project Delivery Methods and Professional Service Risks for Contractors
By Timothy R. Conway, Edward B. Keidan and John S. Mrowiec Conway & Mrowiec
he method of project delivery creates risks that contractors need to address in their insurance programs, and also may affect the availability of insurance coverage for design errors, a concern for both owners and contractors. This article gives you a checklist of insurance issues when design-related and professional services are provided under project delivery methods other than the traditional design-bid-build method.
Construction Management and “Contractor’s Professional Liability Policy”
Because a construction manager provides services such as evaluating bids, scheduling, arranging permits, and 8 • Building Chicago Fall/Winter 2012
performing value engineering, a construction manager needs coverage for “professional acts,” which typical general liability policy for contractors excludes coverage for. The “professional acts” exclusion may be broad enough to deny coverage not only for design services performed by architects or engineers, but also any services that contractors typically perform as incidental to means and methods of construction. In addition, the typical general liability policy is limited to claims for bodily injury or damage to property other than the project that is under construction. There is no coverage for economic losses, such as defective design or cost overruns and delays due to planning or other errors. That’s why contractors need professional liability coverage.
Table of Contents for the Digital Edition of Building Chicago -Fall/Winter 2012
A Message from the Builders Association President
A Bag of Mixed Greens
I’m Covered by Insurance when the Roof Leaks, Right?
A Method to No Madness
Index of Advertisers
Building Chicago -Fall/Winter 2012