TABLE OF CONTENTS As the advantages of the design-build process become more widely recognized, an ever-increasing number of owners, design professionals, and contractors are becoming interested in using and/or participating in the process. The dynamics of today s construction world suggest that the design-build market share will continue to grow at the expense of other delivery systems. However, there are some challenges to the growth and successful use of the design-build process. One of these challenges has been, and continues to be, the implementation of integrated insurance and surety programs that address some of the unique risk issues associated with design-build. [1]
Until the late 1990s, the insurance and surety industries were reluctant to embrace design-build. They feared that the risks resulting from the merger of design and construction created far greater exposure to claims and potential losses than those resulting from traditional project delivery systems where the architect or engineer (A/E) is retained directly by the owner. [2] Under traditional delivery systems, liability for design defects traditionally falls on the A/E, while liability for construction defects traditionally falls on the contractor, who has no privity of contract relationship with the A/E. Construction insurance and bonding products have long addressed liability exposures under traditional project delivery systems and provide fairly predictable coverage.
The primary distinction between design-build and all other project delivery systems is the merger of design and construction into a single point of responsibility, making the design-builder accountable for the functional performance of the construction project. This has many...
