DBIA Exam: DBIA Exam Study Guide: Questions & Answers: Updated Solution

Professional Liability (E&O) Insurance (Ans- - obtained by A/E - claims made vs. occurrence - renews yearly - covers risk of liability for negligent act, E or O in performance of professional services, economic losses and BI/PD, legal defense - contractors’ contingent and project policies also available - erosion of policy limits for prior claims and attorneys' fees Professional Liability may cover (Ans- - 3rd party damages as result of negligence - economic losses - redesign - correction of defective work - cost overruns - delays - business interruption and/or los of useBuilder's Risk ("All-Risk") (Ans- - first-party coverage against physical damage to project during construction - can be obtained by Owner or design-builder Potential Builder's Risk policy revisions for DB (Ans- - design-related exclusions - all members of design-build are named as insured - waiver of subrogation among the design-build team Other Insurance (Ans- - workers' compensation: risk of liability due to injuries to workers, varies by state - employer's liability: risk of liability to Owner from employee injuries caused by occupational diseases - Auto liability: risk of liability to 3rd parties for BI/PD cause by vehicle accidents in connection with the projectSurety Bonds (Ans- - payment and performance bonds required for public works contracts - guarantee, not an insurance policy: credit instrument backed by collateral - DBIA forms do NOT contain an exclusion for design services - Performance bond for benefit of Owner if contractor defaults; (owner must ensure deign and construction are covered)