Professional Liability and the Construction Manager at Risk

Professional Liability and the Construction Manager at Risk

As the person in charge on many construction jobs, architects and engineers are subject to negligence claims for design errors and omissions. Agency Construction Managers observe the construction process, acting as an agent of the owners, and are therefore also targeted for the blame when things go awry.

Being a construction manager at risk is a real concern for someone in this position. Unfortunately, they too are prone to frivolous lawsuits that can threaten their business, as well as personal assets. On a more positive note, professional liability insurance is generally a prerequisite to be considered in order to obtain more desirable contracts, projects, or clients.

Bearing the burden of responsibility

A construction manager fully realizes that the design and engineering work associated with a construction project is critical to the overall success of the completed structure. Accordingly, being the person responsible to overlook the importance of such work, or to fail to devote the attention and care necessary to ensure that it is executed properly, comes at a price.

However, someone must bear the blame when the project becomes exposed the to the potential for significant losses on, and disruptions to, the process. A structure that is poorly designed or that does not adequately account for the relevant mechanical, structural, electrical, and geographical needs is likely prone to failure.

All construction managers, whether “at risk” or through their agents, general contractors, subcontractors, and consultants, can also be held responsible for design/engineering risks to the extent that their management and oversight responsibilities include any design or engineering aspects of the project. They can also be held accountable if they perform any design or engineering activities, such as preparation or review of shop drawings, or incidental design changes associated with the architectural plans that could lead to conflicts or gaps in the project’s plans.

Professional liability involves the exposure to claims from mistakes in technical or highly skilled areas of work. Such areas of work are commonly defined as “professional services.” In the construction context, professional services can include the following:

  • Architectural and other design (including structural, civil, soils)
  • Planning and scheduling
  • Land surveying
  • Mechanical, electrical, and other engineering
  • Construction management services, and
  • Any logistical work associated with the construction process, including scheduling and project site safety

Professional liability insurance offers protection to a construction manager at risk while in the service of clients. Speak to an agent about any questions or concerns pertaining to this important coverage.