Zurich Introduces Enhanced Professional Liability Coverage for Contractors

Zurich has introduced an enhanced professional liability policy aimed at mid-sized and large construction customers.

“The coverage is designed for the professional exposures of a construction manager, whether offered through an at-risk or agency contract, as well as trade subcontractors with or without direct design exposure,” said Scott Rasor, head of Construction for Zurich’s North America Commercial business division. “The policy covers third-party claims against a contractor. If the contractor is providing design-build services and incurs first-party losses due to the designer’s negligence, the contractor can access this policy’s limits when the subcontracted designer’s professional liability limits are not adequate or available.”

The policy can be composed of three coverage parts:

1) Third-party professional liability that includes defense, mediation credit, and domestic and global coverage

2) First-party professional liability that includes:

• Excess coverage of the underlying professional liability policy if the contractor incurs losses, such as cost overruns, schedule delays and rework due to the negligence of a subcontracted design professional
• The ability for an insured contractor to recover incurred losses, regardless of whether there has been a claim by a project owner or third party
• Providing difference in conditions coverage of losses to the extent that the policy is broader than the architect or engineer’s underlying professional policies, subject to a self-insured retention

3) Contractor’s pollution liability is available on either a claims-made or occurrence basis

Other key enhancements include:

• Damages may include direct damages (cost to repair) and economic loss arising from professional services as part of construction means and methods
• Rectification coverage may be provided to indemnify an insured for necessary expenses incurred to correct a design defect in the works
• Mitigation of loss may be provided to indemnify an insured for necessary expenses incurred to address a pollution condition

Program options include intermediate and large deductibles, customized limits and sublimits based on a customer’s risk appetite and industry-leading capacity with liability limits up to $50 million.

Source: Zurich