Contractors Professional Liability Insurance
CPLI is usually written on a claims-made basis, meaning the policy must be active when a professional liability claim is made in order for coverage to apply. Because of this, CPLI should be carried for a long-term period to ensure there is no possibility of an excluded claim in the future.
The policy may be tailored to include specific types of work done by the design professional. Alternatively, the policy can be made broader by including a list of covered activities.
As an “all-risk” coverage, there are certain things that are excluded under a typical CPLI policy. Typical exclusions include:
• Failure to complete a project on time
• Deliberate noncompliance with laws and regulations
• Performance guarantees (warranties)
• Ownership, use or maintenance of mobile vehicles, such as automobiles, watercraft or aircraft
• Products made by the insured
• Faulty workmanship (this is considered a construction risk rather than a design risk)
• Governmental actions/war
• Contractual liability
Normally reserved for design professionals, such as architects, engineers or web designers, contractors professional liability insurance (CPLI) protects contractors from claims arising from negligent errors or omissions that occur while they are performing a professional service. This coverage has become increasingly necessary for contractors who have taken on the responsibility of both designing and building.