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If you're one of the growing number of contractors who does design–build, you're responsible for project design in addition to your normal construction obligations. That means you're taking on a new risk. Just how much of a risk is
design liability? The table of sample claim cases below confirms that there are significant claims in design–build. These claims occur throughout all regions of the country and vary in the type of claim.
Design errors and omissions could result in construction delay, loss of use or business interruption claims. Be sure that you have comprehensive coverage to guard the assets of your company.
- Explosion at Plant Caused Property Damage
- State: Alabama
- Project Type: Papermill
- Claimant: Owner
- Indemnity: $800,000
- Expenses: $45,077
- Problems with Backup Components
- State: California
- Project Type: Utility Plant
- Claimant: Owner
- Indemnity: $900,000
- Expenses: $107,196
- Problems with Gas Compressors
- State: California
- Project Type: Utility Plant
- Claimant: Owner
- Indemnity: $2,187,538
- Expenses: $1,489,331
- Design defects; Installation errors
- State: California
- Project Type: Child Care Center
- Claimant: Owner
- Indemnity: $220,000
- Expenses: $38,000
- Building Collapse/Multiple facilities
- State: Connecticut
- Project Type: Apartment Building
- Claimant: BI/Workers
- Indemnity: $980,000
- Expenses: $93,857
- Structural Defects
- State: Florida
- Project Type: Athletic Stadium
- Claimant: Owner
- Indemnity: $99,890
- Expenses: $1,711
- Design not according to code for entrance ramp
- State: Massachusetts
- Project Type: Retail Store
- Claimant: 3rd Party
- Indemnity: $79,142
- Expenses: $10,651
- Multiple defects in residence
- State: Minnesota
- Project Type: Residential Construction
- Claimant: Owner
- Indemnity: $131,000
- Expenses: $59,165
- Roofing structural problems and water intrusion
- State: New York
- Project Type: Office Condominium
- Claimant: Owner
- Indemnity: $64,500
- Expenses: $17,531
The above is a representative sample of claims reported on design-build cases to Victor O. Schinnerer & Co., Inc.
This information is provided by Victor O. Schinnerer & Company, Inc. as the program administrator for the CNA Professional Liability Insurance Policy for Design Professionals. The CNA/Schinnerer Program is the Commended Program of The American Institute of Architects and the National Society of Professional Engineers.
In each issue of Constructive Comments we answer questions on important contractor issues. Do you have a question you would like answered? Please submit all questions to: Attention: Constructive Comments, at info@schinnerer.com or fax to 301-951-5444.
This article is taken from Constructive Comments, Vol. 1, No. 3. The contributing editors are Michael C. Loulakis and Owen J. Shean, shareholders in the Washington D.C. area law firm of Wickwire Gavin, P.C. They can be reached by phone at (703) 790-8750, or by fax at (703) 448-1801. E-mail can be sent to bmoison@wickwire.com .
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