General contractors, construction managers, design/build contractors and all types of trade contractors should note insurance carriers are offering new products. Here are some things to consider before you next talk with your insurance broker:
- New policies are available for integrated project delivery (IPD) contracts. These policies address professional liability, pollution incident liability and contractors design liability in a package policy format.
- Lead designers, general contractors and subconsultants may be covered in this primary layer product.
- Premiums vary widely based on size, complexity, limits and selected deductible. A good benchmark is between 0.5 and 1.5 percent of construction values.
- Construction managers should also note: multi-year policies are available.
Design Professional Liability Coverage (DPL)
Some carriers have expanded eligibility classes and will now consider design-build constructors, construction manager-agency and construction manager-at risk exposures. Factors to consider in order to obtain the best insurance rates include a demonstrated ability to perform professional services in a manner that acknowledges a clear attention to risk management and mitigation through expertise, processes, business longevity, staff professionalism and ethical conduct.
New Pollution Liability Endorsements are available that will provide coverage for pollution incidents independent of the professional services liability. You should also know that Contracting Services Environmental Liability products are available to provide coverage for the environmental exposures of contractors and owners during construction as well as for environmental situations that could develop in the future.
Assessing risk is an important part of your design and construction business process. In some cases, reviewing details of risk management with your construction attorney may be worth the extra time and might just put you in a better position in the future.