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Construction – Design-Build Delivery Method Exposure

A design-build agreement between an owner and design-builder represents the contractual relationship between the parties of the construction project.  The design-builder must first assess the risks and responsibilities outlined under the agreement and determine how to manage potential exposure. Typically, a design-builder will assume certain risks, insure others and transfer some risk to their selected design professionals and trade subcontractors.


What is Design-Build Delivery and Why It Matters

Design-Build is a project delivery contracting method within the construction industry. An owner enters into a contract with a Contractor or Design-Builder for the complete design and construction of a particular project. It is prudent for the design-builder to assess the responsibilities and risks they will assume under the design-build agreement and determine how best to manage those risks. A design-builder will assume certain risks, insure others, and transfer risk to design professionals and trade sub-contractors.


Underlying Risk Exposure of Design-Build Delivery Method

Contractors and design builders utilizing a project delivery method for a construction project face both professional and non-professional exposures. The design-builder must assess the responsibilities and risks it has assumed in the contract agreement and determine how best to manage those risks. With the increase in the quantity and complexity of design-build projects, it is important for design-builders and design professionals to equitably allocate risk to the party most suited to manage those risks.


Insurance Solutions for Design-Build Delivery Method Construction Projects

Insurance is an important element in a comprehensive design-build delivery plan to help manage and allocate the risk inherent in most construction projects.  Most exposures can be transferred through a combination of traditional insurance and surety products.  The challenge is selecting the appropriate insurance products to address the specific nature of the design-build delivery agreement entered into by the property owner and the design-build contractor, who is legally liable for professional services.


ACEC Chapter Summary: "Roles, Risks and Insurance Requirements in Public Private Partnership Projects"

American Council of Engineering Companies (ACEC) has published the Third Edition of its prolific book, Public – Private Partnerships:  Opportunities and Risks for Consulting Engineers.  The 2020 edition expands on prior versions, offering proposed guidelines for best practices and other initiatives to improve the performance of the respective project roles and alleviate the risk concerns of consulting engineers in Public Private Partnership (P3) and Design-Build (DB) projects.