The design build model is a popular construction delivery method that streamlines the bidding and building process by involving a single entity. This approach not only reduces costs but also project timelines. However, it’s important to understand the exposure of design build contracts.
Here are three key areas to consider:
- Design build contractors carry vicarious liability even when subcontracting to a consultant. They can be held responsible for any errors or omissions made by the consultant.
- Design build contracts hold the contractor accountable for design errors, even with proper risk transfer in place. This means they are responsible for fixing any design flaws or mistakes discovered during or after construction.
- The design builder assumes liability for mechanical, electrical, and plumbing (MEP) contractors who perform design work for their installations. If any issues arise with the MEP systems, the design builder may be held responsible for damages or expenses.
Architects and Engineers may include limitations of liability on $1 million or less, especially in joint ventures or when hired by a contractor. It’s crucial to review and understand these limitations to ensure adequate protection.
While coverage is available for all these exposures, it’s important to inform insurance carriers about project operations and ensure they understand the coverage intent. This helps in to mitigate risks and liabilities.
The design build method offers a streamlined approach to construction, saving time and money. By considering vicarious liability, design errors, liability of MEP contractors, and limitations of liability, project owners and contractors can effectively manage risks and ensure adequate insurance coverage.
Check out our professional liability services to learn how we can support your design build firm.
