Chapter 6 - § 6.7 • ALTERNATIVE FORMS OF COVERAGE FOR A PARTICULAR OR SPECIALIZED SITUATION

• Jurisdiction: Colorado

§ 6.7 • ALTERNATIVE FORMS OF COVERAGE FOR A PARTICULAR OR SPECIALIZED SITUATION

§ 6.7.1-Project Policies

Project insurance is in response to the problem of obtaining separate policies for the many design professionals who may be involved in a large project. When a group of design professionals form a team, that team purchases professional liability coverage, known as a "project policy," that names all design professionals working on the project and holds them jointly and severally liable. This is similar to the joint venture-type coverage that is required when a joint venture is formed for a particular project with a comprehensive or professional liability policy for that venture. The design team typically receives coverage similar to that of architects and engineers under their individual policies.

When a project policy is obtained by the design professionals, a separate project-specific policy is unnecessary. As such, the design professional should have an adjustment made to its existing liability insurance so that it is not paying double premiums for the same coverage. Also, although some underwriters for such policies will include extensions for claim discovery that last up to five years after the majority of a specific project has been completed, design professionals should remember that they need to have their own professional liability insurance in place to provide coverage for their other activities.

Under a project policy, it is possible for all design professionals to obtain coverage when they previously might not have been able to afford it due to the high costs of such insurance or other underwriting problems. Also, a project policy's coverage remains consistent throughout the life of the project and for a period of time afterwards. Thus, project insurance is only designed for one particular project, and claims related to other projects will not diminish or erode the limits of the project policy.

§ 6.7.2-Wrap-up Programs

Wrap-up insurance is a centrally controlled insurance program written for a specific construction project. It typically covers the owner, developer, general contractor, and all subcontractors for many types of losses occurring during the construction. Such wrap-up plans typically include workers' compensation, employer's liability, general liability, and excess insurance. Some wrap-ups offer professional liability and pollution coverage. Usually, these programs will exclude automobile insurance and bonding. Denver International...