E&O Market for Residential BC
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Tip: If you are posting a market request, include the state abbreviation in your post title to get better responses.
Tip: If you are posting a market request, include the state abbreviation in your post title to get better responses.
E&O Market for Residential BC
Any E&O markets out there for a small residential building contractor (abt $200k in billings) in California?
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InsAgentSF
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- Joined: Wed Mar 15, 2006 8:48 pm
- Location: san francisco
Re: E&O Market for Residential BC
I am sorry but why do you need an E&O for a Contractor? Get him a GL and P/C.O will cover him... Am i right?
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LadyBroker
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E & O
What is your contractor doing? I can likely help you, why don't you send me a PM and we can discuss further. thanks!
"It's a typical day, on the road to Utopia.."
InsagentSF,
FYI
Why should a contractor care about a design professional's design liability?
Today many architects and engineers work directly for contractors. And if a design professional works for a contractor, the contractor is liable for the performance of that architect or engineer's services. The contractor can be held legally responsible if the design professional is found to be negligent in any way.
Contractors can also be held liable for A/E negligence if hire the design firm as a subcontractor or combine with the A/E firm in a joint venture. That's why when a contractor enters into a design-build agreement with an owner, the contractor usually is required, either directly or through its designer, to carry professional liability insurance to cover this exposure. If AGC Document No. 410, for instance, is used in the agreement, the contractor is required to obtain professional liability insurance.
It's also possible that the contractor may have design responsibility and liability even under the traditional design-bid-build project delivery method. However, even though the services are to be provided by a licensed design professional, the risk is still that of the contractor.
OK. But why do contractors need a design liability policy?
Design exposures and losses are not covered by most Commercial General Liability (CGL) policies. Design exposures are the costs required to remedy negligent design and any necessary reconstruction. When a contractor assumes a Single Point of Responsibility (SPR) role with an owner by use of the design/build project delivery, they are providing project design in addition to their construction obligations. The design exposure assumed under an SPR contract may be direct, in the case of a contractor's own in-house design team, or it may be indirect as a result of subcontracting the design to a design firm. Most CGL policies exclude both exposures.
Why doesn't the CGL Policy cover the design exposure?
First, CGL policies typically provide coverage only for bodily injury (BI) and property damages (PD), as defined in the policy. The definitions of BI and PD usually do not include remedial design and reconstruction of negligent design and other associated damages such as delay claims, loss of use and other economic damages. Second, many CGL carriers are not comfortable with the design exposure presented by either design/build or design delegation and, therefore, place a professional services exclusion on their CGL policies. This will then exclude all claims submitted under the CGL policy that arise from design-related services.
FYI
Why should a contractor care about a design professional's design liability?
Today many architects and engineers work directly for contractors. And if a design professional works for a contractor, the contractor is liable for the performance of that architect or engineer's services. The contractor can be held legally responsible if the design professional is found to be negligent in any way.
Contractors can also be held liable for A/E negligence if hire the design firm as a subcontractor or combine with the A/E firm in a joint venture. That's why when a contractor enters into a design-build agreement with an owner, the contractor usually is required, either directly or through its designer, to carry professional liability insurance to cover this exposure. If AGC Document No. 410, for instance, is used in the agreement, the contractor is required to obtain professional liability insurance.
It's also possible that the contractor may have design responsibility and liability even under the traditional design-bid-build project delivery method. However, even though the services are to be provided by a licensed design professional, the risk is still that of the contractor.
OK. But why do contractors need a design liability policy?
Design exposures and losses are not covered by most Commercial General Liability (CGL) policies. Design exposures are the costs required to remedy negligent design and any necessary reconstruction. When a contractor assumes a Single Point of Responsibility (SPR) role with an owner by use of the design/build project delivery, they are providing project design in addition to their construction obligations. The design exposure assumed under an SPR contract may be direct, in the case of a contractor's own in-house design team, or it may be indirect as a result of subcontracting the design to a design firm. Most CGL policies exclude both exposures.
Why doesn't the CGL Policy cover the design exposure?
First, CGL policies typically provide coverage only for bodily injury (BI) and property damages (PD), as defined in the policy. The definitions of BI and PD usually do not include remedial design and reconstruction of negligent design and other associated damages such as delay claims, loss of use and other economic damages. Second, many CGL carriers are not comfortable with the design exposure presented by either design/build or design delegation and, therefore, place a professional services exclusion on their CGL policies. This will then exclude all claims submitted under the CGL policy that arise from design-related services.
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InsAgentSF
- Insurance Journal Addict
- Posts: 267
- Joined: Wed Mar 15, 2006 8:48 pm
- Location: san francisco
