When a construction project goes sideways, the instinct is to look at what went wrong on at the jobsite. But in most professional liability disputes, the real exposure was created weeks or months earlier, in a coordination meeting that wasn’t documented, a change order that wasn’t signed, or a subcontractor scope that was never clearly defined.
A new AXA XL risk bulletin identifies 13 professional liability risk factors for general contractors, and the pattern across them is consistent: the gap between good practice and defensible practice is often a documentation gap.
Where exposures come from
Design coordination failures top the list. On large projects with multiple architects, engineers and specialty consultants, misaligned drawings between Mechanical, Electrical and Plumbing (MEP) systems and structural plans are a common source of costly rework and claims. Building Information Modeling (BIM) clash detection and formal coordination meetings with documented resolutions are standard mitigations, but they only protect a general contractor if the process is recorded and participants’ verification documented.
Change management is another persistent vulnerability. Ambiguous scopes and informally approved field modifications routinely trigger disputes over cost, schedule and responsibility. The fix is straightforward: standardized change orders, a formal Request for Information (RFI) process, and a rule that no work modifications proceed without written authorization. The problem is that on busy project sites, those disciplines slip.
Subcontractor performance rounds out the top tier of exposures. A general contractor is typically held responsible for a subcontractor’s mistakes regardless of cause, which makes prequalification, on-site supervision and contractual quality standards non-negotiable risk management tools, not administrative overhead.
Securing appropriate professional liability coverage for design services, alongside builders risk, pollution liability and subcontractor default insurance, is essential on any complex project.
The insurance dimension
The bulletin also flags a risk that is easy to underestimate: improper delegation of design responsibility. Design-assist, design/build, value engineering, and field changes to design responsibility blur the line between contractor and designer, and without clearly defined responsibilities in contracts and professional seals where required, a general contractor can find itself holding professional liability exposure it never intended to assume. Securing appropriate professional liability coverage for design services, alongside builders risk, pollution liability and subcontractor default insurance, is essential on any complex project.
What this means in practice
The 12-point mitigation checklist accompanying the bulletin is worth reviewing before the next project kicks off, not after the first dispute arises. Standard of care in professional liability cases is often established by what a contractor documented, not just what they did.
The full bulletin and checklist are available HERE.
About the author
Marcy Zeichner is Head of Pollution Services on AXA XL’s Environmental Insurance team.
