Professional liability insurance is often an after-thought for construction projects. Arranging cover for employers and public liability insurance including cover for the actual site works would be a priority for the contractors and site owners with cover for professional liability not being considered until the process of insuring the other risks is well under way.
The majority of professional liability claims are made by owners against architects and engineers they have hired to provide professional services related to the design and construction of a building. Claims may arise out of the alleged negligent acts, errors, or omissions of the design professionals in providing services related to the project where failures of structural components or equipment result in losses or damage to the owners and third parties.
Claims by owners may also allege breach of contract where design professionals have failed to meet the terms or conditions of the written contracts for professional services. Errors and omissions in rendering of professional services may involve bodily injury or property damage, but these are often the subject of general and excess liability insurance rather than professional liability coverage.
Damages other than bodily injury and property damage associated with professional errors and omissions may be economic in nature and may include the cost of redesigning portions of a project that fail to meet professional standards and delay in completion of the structure. These economic damages are the most common losses that give rise to professional liability claims against architects and engineers working on construction projects.
Professional liability risks are among the most difficult to insure for project owners, contractors, architects, and engineers who are at risk for claims arising out of the acts, errors, or omissions of design professionals. Given the limited capacity for professional liability insurance and the selective appetites of underwriters for these risks, it is important to get an early start in planning to manage professional liability risks for construction projects and to engage the services of a Professional Insurance Broker with specialist knowledge of the policy cover, contract obligations and risk management issues faced.
Remember: Professional Indemnity Insurance provides essential financial protection for your Construction Contracts. It is essential cover for construction professionals to help protect their business and personal assets.
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