As a project owner it is very important to require evidence of professional liability insurance from whichever construction firm you decide to hire. There has been an increase in requests for contractors to evidence professional liability in recent times, and that’s a great thing, but before you go asking any company to provide evidence, as yourself the following: What is it that I would like to insure against?
This is something that is so simple, yet easily overlooked. Take the following scenario for instance. A designer-builder purchases professional liability for the design team which only protects from design errors and not professional liability risk. Or how about when an owner accepts a certificate from an engineering firm under contract with the construction firm, which isn’t held under the direct owner. This means that there is no contractual relationship between the owner and the engineering firm directly. Both situations can create issues later on down the line.
The thing you need to figure out first and foremost is what your needs are. You can chose to protect from only design errors or protect against a broad range of construction related professional liability. When you sit down to create a professional liability specification, think about the pitfalls and whether or not you want to protect against design errors or professional risk as well. By making the design builder carry professional liability as opposed to just design liability for the design team, you are protecting against professional risk which includes design as well.