Today, contractors are being drawn into the earliest stages of the development cycle for their insights and experiences. Even if you are a general contractor or trade contractor, your “consultative advice” on constructability, sequencing, and scheduling can be considered professional services and create liability exposures for the firm that fall outside the scope of coverage found in a commercial general liability policy. Other examples are:
- Your website advertises the company as design-builders or construction managers. This may constitute a higher degree of expertise on their part.
- You hire out the “stamping” of plans, but they could still be held vicariously liable if they hire an incompetent design professional.
- Field changes you make are not signed off by a design professional, which adds additional liability back on the contractor if this activity leads to a loss down the road.
- You rely on a manufacturer warranty but finds the manufacturer out of business at the time of loss. This could also happen with a design professional. They could be out of business or their limits severely reduced by other claims.
- A standard umbrella policy will not cover professional acts. A contractor is facing design allegations, but no bodily injury or property damage has occurred. Their general liability/umbrella policies are not triggered, leaving them without funds for defense against the design allegations.