In an industry where contract performance is frequently governed by performance specifications, ever-shortening delivery dates, and a desire for innovative outcomes, many contractors are exposed to rising professional liability risks associated with engineering, planning, specifications, construction management, and field modification activities. These exposures are determined not only by the services performed, but also by the type of contract and project delivery method under which the contractor is engaged.

This article will examine project delivery methods and their risks to help contractors strategically manage and overcome future professional liability issues.

Design-Build

Under this arrangement, the owner contracts solely with the design-builder, who typically accepts full responsibility for all project design and construction activities.

The design-builder can serve as an integrated operator and use in-house professionals (e.g., architects, engineers, and construction personnel). Or, a joint venture can be formed between the design and construction firms to fulfill the obligations of this specific effort. However, it’s most common for the design-builder to subcontract the design services to a lead design professional.

In most design-build arrangements, construction begins with the plans and specifications less than 100% complete. In fact, construction has been known to start with only 30% to 40% of the planning in place on some projects. Because of this, the level of professional risk on such a project is considered to be inversely proportional to the percent completion of those plans and specifications prior to starting construction.

In other words, the less complete the plans are the greater the professional risk. While this statement can be argued, one fact is prevalent – communication between design and construction personnel is essential at every construction phase in order to reduce errors and resulting liability. Here are a few areas where caution is necessary.

Design Services

While design-build offers numerous time and cost-saving advantages for the owner, the design-builder’s professional liability exposure is significantly higher since it assumes all of the project’s design responsibilities.