Errors and Omissions Insurance for General Contractors
Errors and omissions (E&O) insurance protects professionals from mistakes in contracts, including items that were left out of the contract. When these items are discovered after the contract has been signed, it can result in a costly lawsuit. E&O insurance protects against this type of legal action, which is usually not covered under general liability insurance.
Why General Contractors Need E&O
While E&O insurance is widely used by realtors, insurance agents, and lawyers, for general contractors, E&O can be more difficult to find. General contractors are often tasked with overseeing large-scale design projects with numerous opportunities for failures. When a problem arises that can be traced back to the building design, the general contractor is often named as one of the responsible parties, since he was involved in so many different aspects of that building’s creation.
Professional Design Insurance
With professional design insurance (PDI), general contractors have access to insurance tailored to their own unique needs. Rather than general E&O insurance that covers errors and omissions from contracts and original agreements, PDI provides protection specific to building design professionals, including architects and engineers, construction managers, and environmental consultants.
PDI covers the many risks general contractors face in the course of doing work. This includes work performed by subcontractors and independent contractors hired by the general contractor to perform work on a building. In many cases, this coverage applies only to errors and omissions that occur during the period in which a policy is in effect. However, some E&O policies may make occasional exceptions to this, especially if the general contractor or subcontractor had no way of knowing the error might be the basis of a claim.
While E&O insurance can protect a general contractor against a claim, the best course of action is to avoid a claim in the first place. Education is a fundamental component of this, which is why general contractors have access to a wide variety of continuing education (CE) opportunities designed to prevent the errors that lead to costly claims. Professional Design Insurance Management Corporation hosts loss prevention seminars to provide CE opportunities to design professionals. When combined with its loss prevention manual, these opportunities have helped give PDI Management Corporation a 90 percent customer retention rate.
PDI Management Corporation works to create a perfect set of solutions for general contractors, including insurance that protects it against claims for work performed. Not only will general contracts enjoy affordable rates, but they’ll also have an insurance plan that meets their own unique needs.