Insurance for Design-Build Projects - Design-Build for Water and Wastewater Projects - page 153

did not already contain a PL exclusion, most savvy underwriters will add one. The con-
struction contractor should look for the CG 2280—Limited Exclusion-Contractors-Pro-
fessional Liability rather than the CG 2279. This endorsement excludes all liability arising
out of the insured's provision of professional design services, but it grants back coverage
when those design services are performed in connection with construction work by or
on behalf of the insured. Consequently, a contractor with a CG 2280 attached to its CGL
policy has coverage for bodily injury or property damage resulting from design errors on
DB projects—including vicarious liability for the operations of a subcontractor—subject
to the remainder of the policy's provisions. The attachment of the CG 2280 does not pre-
clude the purchase of the CPPI policy as discussed previously. The CGL policy provisions
provide coverage for bodily injury and property damages, the policy will never provide
coverage for economic damages.
To add to the list of common exclusions mentioned in DBIA's Manual of Practice
(DBIA 2008), other exclusions that the DB firm should be aware of include contractual
liability; pollution; aircraft, automobile and watercraft; mobile equipment; damage to
your work; and damage to impaired property.
Other coverage enhancements in addition to the CGL policies of design and con-
struction firms that help firms meet contractual requirements are also readily available.
One of the most common contractual requirements is additional insured (AI) coverage
for the project owner, general contractors, and/or the consultant/contractor that hired a
particular firm. The most common AI endorsements offer coverage for ongoing and com-
pleted operations (ISO forms CG 2010 and CG 2037). Coverage is typically only granted
when the insured has contractually agreed to add the other entities as additional insureds
and legal liability is also alleged against the named insured. As insureds, AIs are granted a
defense under the policy to which they have been added as additional insured. Waiver of
subrogation and per project or per location general aggregate limits endorsements are also
common contractual requirements. These coverage endorsements are readily obtained in
the marketplace.
Owner's and Contractor's Protective Liability (OCP)
The liability imposed on an owner or general contractor for issues arising out of the opera-
tions of subcontractors, or the owner's or general contractor's supervision thereof, is the
exposure addressed by CGL insurance. Though there has long been a misconception
about this, protective coverage for the use of independent contractors is automatically
provided in the owner's or contractor's general liability policy. Nonetheless, many owners
and contractors prefer to pass the burden of insuring the exposure to the hired contractor
or subcontractor.
This can be accomplished by
• Requiring the contractor to add the owner as an additional insured on the con-
tractor's GL policy.
• Including a hold harmless agreement in favor of the owner in the construction
contract, thereby necessitating the contractor's purchase of contractual liability
insurance.