U.S. domiciled contracting firms that are qualified to engage in the design and construction of traditional building construction, infrastructure, and land development projects and are responsible for providing the following services:
- Design/build (self-performed design)
- Design/build (non-self-performed design)
- Design delegation
- Construction management (at risk)
- Construction management (agency)
- Self performed design
A contractor was hired to build a call center using design-build project delivery. The General Contractor retained a design professional to design the facility and successfully secured indemnification and hold harmless agreements in the contract. At the completion of the construction phase, it was discovered that insufficient design of the utility conduits prevented certification of the facility, resulting in significant delays. By the time suit had been brought the design professional declared bankruptcy and the general contractor was unable to enforce the indemnity agreement. The contracting firm incurred $1.5 million in defense and indemnity costs.
A general contractor was retained by a biopharmaceutical firm to design and build a “state of the art” process facility. Cracks appeared in the ground floor slab approximately one year post completion. After extensive forensic research it was determined that the slab was under-designed and was unable to support the manufacturing equipment. The cost for slab replacement exceeded $600,000.
A construction management firm responsible for the management of multiple subcontractors failed to adhere to change order provisions in the client contract. The failure to coordinate, manage and report changes to the owner resulted in project delays and contingent business interruption damages in the amount of $570,000.
The claim scenarios described here are hypothetical and are offered solely to illustrate the types of situations that may result in claims. These scenarios are not based on actual claims and should not be compared to an actual claim. The precise coverage afforded by any insurer is subject to the terms and conditions of the policies as issued. Whether or to what extent a particular loss is covered depends on the facts and circumstances of the loss, the terms and conditions of the policy as issued, and applicable law.