As a construction manager, you're the traffic cop on the project, giving directions - and taking risks. Construction Managers Professional Liability Insurance (also known as Construction Managers Errors & Omissions Insurance or Construction Management Firm E&O) can protect you against client allegations of professional negligence or failure to perform as promised in your contract.
Here's why you should have this coverage:
- Standard Liability insurance won't fill the bill. Your Commercial General Liability (GGL) policy does not cover errors, contract performance disputes, or other Professional Liability risks. A contractor without E&O is like a physician practicing medicine without Malpractice Insurance.
- You need to protect your pocketbook. Losing a lawsuit could be a serious financial blow - and even if a claim is baseless, it will cost your company dearly to defend it.
- Stuff happens. No matter how high your level of experience and expertise, no one is perfect. Even a minor error (from equipment failure to human oversight) can lead to a serious, and costly accident or injury.
- You can't be everywhere at once. The larger and more successful your business, the harder it becomes for you to personally handle every aspect of each project. An E&O policy will cover not only your mistakes, but those of your employees and independent contractors.
- Your clients might require it. Some clients won't give you their business unless you and your subcontractors carry this coverage. Even without this requirement, having E&O insurance can help strengthen relationships with your clients by reassuring them that your company can meet its financial obligations under the contract.
Our Construction insurance specialists would be happy to tailor a Contractors E&O policy to the needs of your business. See Understanding Insurance Risk Manager Errors and Omissions Insurance for related coverage options and Why You Need Errors and Omissions Insurance as a Property Manager for similar scenarios. Talk to an agent.
Frequently Asked Questions
Do I need Construction Managers Errors & Omissions Insurance?
Yes. It protects you against claims of professional negligence, contract disputes, and other performance-related exposures not covered by general liability policies.
Will my Commercial General Liability (CGL) policy cover E&O claims?
No. A CGL policy typically covers bodily injury and property damage, not professional errors, omissions, or failures to meet contractual obligations.
Does E&O insurance cover mistakes by my subcontractors?
Often it can cover mistakes by employees and some independent contractors, but you should verify contract language and named insured provisions with your insurer.