Protect Against Loss From Construction Project Mishaps
On a sizable project, the construction manager operates on behalf of a project owner to pull it all together. A manager is responsible for the work of whatever sub-consultants may be involved, such as the architect or the engineers who deliver the design. Construction management risk deals with the possibility of the work coming in below performance expectations, or not at all.
Opportunities for Risk
A construction manager has a long list of jobs, and a long list of people to supervise in those jobs. There is potential for disruption at any point in the process. Some of the main responsibilities are:
- Contract preparation and negotiation
- Obtaining and evaluating bids
- Coordinating work schedules
- Code Compliance
Insurance for Mistakes
One of the top reasons a claim is made against a manager is construction delays. Postponements or stoppages can result in a domino effect of broken agreements and escalating costs. Another main reason for lawsuits is a project going over budget. When it is seen as the managers responsibility to keep the cost within range, going in excess of the agreed price may lead to a claim of financial misconduct. Construction management risk offers professional liability coverage to protect against loss due to a real or perceived failure of organization. It is also a policy that may demonstrate good faith and responsibility, and therefore good business practice.