The Errors & Omissions Playbook in Construction
Many construction projects have a sole prime contractor who is responsible for all build and design work. In some cases, a definitive error or omission is discovered in the design during construction and/or procurement. The error then causes additional construction costs to repair or replace the element which can lead to a major financial loss.
I’ve seen this play out consistently for contractors performing design services for a client directly or a design-build entity as a subcontractor.
Avoiding Costly Repairs & Replaces to Defective Design Builds
When a problem arises during construction using traditional design-bid-build, the project owner often files a claim against the design team. In some cases, the construction entity that discovers the problem brings a contractual claim for delays and extras against the project owner, who then involves the design firm in the claim’s resolution.
About 33% of claims against design firms occur before a project is substantially complete. If technical design errors are identified early, they are usually resolved quickly and often at a minimal cost of time and money.
The Importance of Rectification Coverage
Rectification coverage in a policy expands coverage by setting up a system for the early involvement of a claims specialist when you discover a design deficiency while providing design services. This expanded rectification provision equips you with another tool to take more control over your professional liability exposure in providing design services on all projects. Additionally, this includes those where you are leading a design-build project.
You can cite the expanded coverage when educating clients on your ability to provide a timely and responsive project. Interested in learning more about this coverage and how it can benefit your construction practice? Contact Sam Maack at sam.maack@marshmma.com.
